Remitly Global, Inc. (RELY) Earnings

Management highlights

### Strategic & Organizational Updates - CEO Sebastian Gunningham reoriented the company toward smaller cross-functional teams, clearer ownership, customer-first product design, AI embedded in all processes, and faster decision-making, resulting in a flatter, more agile organization - Core competitive advantage remains the global pay-in/payout network, which expanded to 179 total receive geographies (32 enabled for both send and receive) with the addition of 5 new countries this quarter - Strengthened regulatory foundations with new licenses in the UAE (stored value facilities license), UK (electronic money institution license), and an EU payments institution license extension, opening doors for regional new product development - Capital allocation prioritizes reinvestment in profitable growth paired with disciplined, opportunistic share repurchases; the company generated $130 million in free cash flow this quarter and repurchased $21 million of stock in Q2 ### Core Send Operational Progress - Added new real-time pay-in rails (FedNow) in the U.S., improving funding speeds; nearly 70% of global funded transfers were delivered in under 20 seconds this quarter, an all-time high - Remitly is a founding member of the OpenUSD stablecoin consortium, which is expected to cut settlement times by up to 1 day and allow Remitly to capture stablecoin wallet economics; early use in treasury settlements has delivered modest benefits to date - AI-driven fraud prevention has improved transaction loss performance, with Q2 provision for transaction losses coming in better than expected at 10.4 basis points of send volume ### Growth Accelerator Progress - For high-value senders (single transactions of $5 thousand or more), added bank wire funding options, raised send limits, and reduced friction in key growth regions; high-value send volume more than doubled in the US-Mexico corridor this quarter - For Remitly Business, added Bulk Send functionality and expanded to 23 new EU countries to broaden the customer base - For receivers, grew the product footprint from 6 to 130 countries and launched a USDC stablecoin wallet with a debit card starting in Latin America, allowing receivers to get paid, hold, and spend stablecoins - Launched the Remitly Global Card, an all-in-one product combining send, borrow, spend, and save functionality, with features including no monthly fees, the lowest available remittance rates, no foreign transaction fees, global ATM access, direct deposit, and a line of credit for members; the card is designed to serve cross-border communities underserved by traditional banks, with plans for gradual global expansion ### AI-Driven Efficiency - AI delivers three core benefits: faster product development/build speed, improved personalized customer trust/experience, and lower operating costs; cost savings are the clearest benefit to date - All expense categories delivered AI-driven leverage: customer support and operations expense fell to 5.3% of revenue (down 68 basis points year-over-year); technology and development expense fell to 11.2% of revenue (down 175 basis points year-over-year); G&A expense declined 11% year-over-year (the first ever year-over-year decline as a public company, down 295 basis points as a share of revenue) - AI-driven productivity has allowed the company to hold headcount below plan while growing the business, with productivity gains outweighing incremental AI-related investment, a trend expected to continue

Guidance

- Q3 2026 revenue guidance is $505 million to $507 million, representing 20% to 21% year-over-year growth, with expected total company revenue growth of over 20% for the second half of 2026, an upward revision from prior expectations - For Q3 2026, send volume growth is expected to exceed revenue growth, and revenue growth is expected to modestly exceed quarterly active customer growth; send volume per active customer is projected to grow in the mid to high single digits, driven by mix shift toward high-value senders and business customers - Full year 2026 revenue guidance is $1.978 billion to $1.988 billion, representing 21% to 22% year-over-year growth - Q3 2026 adjusted EBITDA guidance is $92 million to $94 million, representing an 18% to 19% adjusted EBITDA margin, a 350 basis point year-over-year expansion - Full year 2026 adjusted EBITDA guidance is $410 million to $415 million, representing a ~21% adjusted EBITDA margin, an upward revision of more than 400 basis point year-over-year expansion; the improved outlook reflects stronger revenue expectations, organizational cost assessment, and continued cost discipline leveraging AI - Transaction margins for full year 2026 are expected to remain broadly in line with 2025 normalized levels; transaction loss rates are assumed to normalize to 11 basis points for the second half of the year - Marketing investment is expected to deliver continued efficiencies in the second half of 2026 as the company prioritizes high-ROI opportunities, with a gradual, deliberate ramp in marketing for high-value senders starting in the second half of 2026

Segment performance

Core Send: Total Q2 2026 revenue was $495 million, up 20% year-over-year. Send volume grew 27% year-over-year to $23.5 billion, with send volume per active customer reaching a record $2.3 thousand, up 6% year-over-year. Quarterly active users grew 20% year-over-year to 10.2 million, crossing the 10 million milestone for the first time. The overall take rate was 2.11%. U.S. revenue grew 24% year-over-year, while Rest of World revenue grew 18% year-over-year. Revenue from transactions to regions outside of India, the Philippines, and Mexico made up over 50% of total revenue and grew faster than overall revenue. Growth Accelerators (all offerings outside Core Send): This segment is on track to reach ~5% of total annual revenue in 2026 and exceed 10% of total revenue by 2028. High-value senders: Volume grew 37% year-over-year, representing a 70 basis point increase in revenue mix year-over-year. June 2026 volume growth was temporarily softer due to Indian rupee fluctuations and Reserve Bank of India foreign currency measures. Remitly Business: Ended Q2 with over 25 thousand users, with sequential acceleration in both volume and revenue quarter-over-quarter; more than 80% of new business platform customers are new to Remitly, and average business customers send 10 times per quarter. Receivers: Expanded from 6 to 130 countries this quarter, and generated its first revenue, an important inflection point for this segment. Spend, Save & Borrow: Launched the Remitly Global Card this quarter, which already has strong early customer uptake with conversion rates exceeding prior benchmarks. Overall, transaction margin grew 25% year-over-year to $334 million, with a 67% transaction margin (up 35 basis points year-over-year). Adjusted EBITDA was a record $115 million (23% margin), up significantly from guidance. Free cash flow was $130 million, nearly tripling year-over-year.

Risks & headwinds

- Short-term headwinds for high-value sender volume in Indian corridors due to Indian rupee volatility and Reserve Bank of India foreign currency mobilization measures; management expects these headwinds to normalize by the end of 2026 - Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from guidance, as disclosed in the company's SEC filings - Receiver product and other new growth accelerator offerings are still in early stages, and product-market fit and long-term growth potential have not yet been fully proven - Transaction loss rates can fluctuate quarter to quarter, requiring ongoing rigorous risk management - While AI productivity gains have outpaced incremental investment to date, future benefits are not guaranteed and the trajectory of efficiency gains is uncertain

Analyst Q&A

• Q: What area of the business is management most excited about and leaning into, given the strong momentum across the Global Card, USDC, AI, and Remitly Business? /

  A: Management notes the business is performing well across many segments, with broad momentum across network, risk, compliance, and product development. While it is hard to pick a single standout, the combined momentum of all business lines and the steady rhythm of product upgrades and new launches is what is most encouraging for the company right now.

• Q: What is the cadence and magnitude of planned marketing expansion for high-value senders in the second half of 2026? /

  A: Management remains very confident in the long-term growth potential of the high-value sender segment, where demand has already exceeded early milestones including the first $300 thousand single transaction and first customer sending over $1 million in a quarter. Marketing investment will be deliberate, gradual, and disciplined, with learning from early campaigns preceding larger expansion planned for 2027.

• Q: How are AI productivity gains driving the much stronger-than-historical incremental EBITDA margins this quarter, and what does this mean for future reinvestment? /

  A: AI efficiency gains are accelerating and are being felt across all business segments: AI-driven fraud detection has improved transaction losses, AI has reduced customer support costs, AI boosted tech and development productivity, and drove the first ever year-over-year decline in G&A. Management does not expect these efficiency gains to decelerate, and will continue embedding AI across the company to drive ongoing productivity improvements.

• Q: What is Remitly's unique value proposition for receiver monetization that differentiates it from local and global competitors? /

  A: Remitly's unique advantage comes from its existing relationship with 30 to 40 million global receivers, who already receive regular repeating transfers from senders on the platform. The company leverages this existing connection to offer useful products like USDC holdings, cards, and savings to receivers. While the opportunity is compelling, it is still early days and the business model is still being tested and iterated.

• Q: Is the 10% of revenue target for growth accelerators by 2028 conservative, given the large market opportunity for these new lines? /

  A: The 10%+ target is a deliberate intermediate milestone, not an upper limit. Management is focused on testing new products, confirming product-market fit, and building long-term sustainable businesses before scaling aggressively, rather than chasing near-term revenue targets. All growth accelerator bets are in very large, underpenetrated markets, and management expects these lines to be much larger than 10% of revenue over the long term.