Right, so next up here is Remitly. We're very happy to have Matt Oppenheimer, CEO of Remitly, co-founder of Remitly as well. Matt, thanks for joining us. Really looking forward to the conversation.
Thanks for having me, Will. Great to be here.
So look, I mean, let's kick it off high level. Two years after the company went public, stock has roughly doubled year to date. Company's tracking to full year Adjusted EBITDA profitability. Revenues are growing at 40%-50%. What's been driving the momentum in the business more recently?
Yeah, I think that, it's a continuation. If you look at... one of the things that we were just talking about is, if you look at what's driven the, the momentum, it's foundational in terms of, of who our customers are, in terms of and why they send money. So if you look at, the non-discretionary nature of why our customers send money, it's for basic living expenses, emergency medical expenses, tuition, things that are very much non-discretionary. Combined with the fact that our customers have a lot of tenacity, a lot of resilience, that has meant that kind of, regardless of the macroeconomic backdrop, that the LTV, the retention side of our business, has remained incredibly strong. Then the second component is, I think we'll probably talk about the four areas we're investing in in terms of growth, but our strategy is working, and the areas we're investing in in terms of growth are very much delivering. So very grateful for our customers, very grateful for our business, and we continue to be focused on the long term, but are excited with, you know, the, the short-term results we've also been able to deliver.
I think you guys have bucked the trend in terms of differentiating yourself in the, in the remittance space. I think a lot of, a lot of investors, you know, ask the question, "How do you kind of differentiate these flows?" Maybe, can you talk about the value proposition that Remitly offers over your competitors, and what do you think are the key differentiators on the platform versus other brands?
Yeah. So I think in order to understand the value prop that we uniquely deliver, it's super important for us to understand what our customers care about. Like, when I started the business 12 years ago, thought it was about speed, thought it was about price. Those things do matter, but more so, if you think of who our customers are, might move from Mexico, Central America. We serve now 170 countries, so it is a wide range. But our core customer, you know, sends a few hundred dollars back, probably has more like a blue-collar job and might be reticent as a new immigrant to provide us with the... which we have to collect for compliance reasons, their name, address, date of birth, tax ID, or Social Security number, if they have it.
And then they're trusting us by giving us their funds to deliver it, you know, hundreds of miles or thousands of miles away, oftentimes to be picked up in cash. So trust is paramount. Then, to the differentiation point, the complexity of remittances is so much more than meets the eye. And what I mean by that is, and the complexity, it's hard to deliver a reliable product. So whether that's localization across 4,800 corridors now, whether that's language localization, payment acceptance, compliance, identity verification, all of the back-end systems. So you think about fraud, which we can talk about in more depth to make it more real, but that's very complex, you have to solve with machine learning and other elements. Compliance. Think about treasury, FX, cash management systems. We can't go buy like a core banking system. We have to build a lot of that in-house.
And then the disbursement network, all of those things, if you don't get them right, and it is incredibly hard to get them right if you're a legacy player, and it's incredibly hard to get them right if you're subscale. If you don't get those things right, what happens? Huge amount of friction that's put in front of customer. Delayed transactions for, again, critical reasons that the money is being sent. And that results in a negative brand, in loss of customer trust, and a lack of retention. Now, what we've done is the opposite there, because we have the scale, we have a digital-first approach. And what that means is, you see, you know, you see that in our ultimately, like, retention, that ladders up to revenue, but you also see that in our unit economics, our lifetime value to customer acquisition cost. All of those things are getting better because we're providing, I think, a more reliable and trusted product in an industry where that is, in a customer base where that is paramount.
Makes sense. I mean, let me follow up on pricing. I mean, like you said, pricing matters. It's often cited as a longer-term risk. We were talking before we got on stage about it's difficult to prove-disprove the negative around pricing. You know, I think you guys have done a pretty good job since you went public. The take rate's actually expanded, not gone down. So maybe could you help us unpack your pricing, how it compares to the rest of the market? And as it relates to the more recent trends, what's some of the factors that's driven up the blended take rate?
Yeah, great. All right. Three elements around pricing. The first is that we've seen a lot of stability in pricing. So the last 12 quarters, which is, you know, goes as far back in terms of when we've shared data as a public company, the take rate has been between 2% and 2.5%. So a lot of stability there, between 2% and 2.5%. That's point one, stability in pricing. The second point is that take rate specifically, it makes sense that investors look at it because it's an easy way to calculate, you know, revenue and volume. But when it fluctuates between that 2%-2.5%, it's more driven by mix shift, because primarily, take rate is significantly impacted by average transaction size, if you just do the math.
So if a corridor that has a high average transaction size happens to be more active in a certain quarter, then take rate will go down. And vice versa, if a corridor where you have a lower average transaction size is more active, take rate will go up. And so that's less about pricing, it's more about mix shift, and that's important as you're thinking about take rate. We care internally much more about profit per transaction, and revenue per transaction is, is a good leading indicator of profit per transaction. And then the PPT, profit per transaction, is what we obviously calculate lifetime value off of. So that's super important to understand, in terms of the fundamentals of pricing in our business and when you're looking at take rate.
The third point is the reason we have seen stability in pricing, and you can look at take rate over a longer horizon because it kind of, you know, will net out some of that mix shift. But when you look at the pricing, it's been stable because of that point I made earlier, which is, it's all about trust, it's all about reliability. Price matters as part of that. Like, no customer wants to get gouged. There's a history in this industry that had a lack of trust because there hasn't been the transparency and just kind of fairness in terms of pricing. But we're not always the best price. We're fair and transparent, and we're taking a bunch of costs out of the system. And then the other element is, we continue to get better and better on the reliability side to where that, that moat and that competitive advantage continues to increase.
Makes sense. So maybe just touching on the macro. I mean, most of the conversations around the macro have been relatively upbeat. I always find that, you know, investors have a hard time drawing conclusions about how macro impacts remittances because it is so local to local. How are you thinking about the macro environment right now in your business?
Yeah, I think that there's a couple elements when you think about macro. One is, what's just the predictability and resilience of the service that's being offered? And as I mentioned earlier, I think both because of who our customers are and why they send money. We've seen a lot of predictability through a lot of different economic cycles now over the last 12 years, and that's something I'm super grateful for and super grateful for the customers we serve. The second element of macro is the, you know, changing because we send money now between 170 countries, is changing, you know, FX rates, changing economies, things like that.
What I like about being in 170 countries, combined with the fact that the segment of customers that we serve kind of generally send a part of their paycheck home, is that there's a portfolio approach. So if the dollar strengthens or the euro strengthens or weakens, or you name it, on the receive side, peso, rupee, et cetera, there's a bit more of a portfolio approach now that provides even more predictability and resilience to changing FX rates. The reason I mentioned that the $200-$300 kind of average transaction sizes, our customer segment, unlike some other customer segments, you know, bank- the more, affluent bank customers, might have the privilege to wait to send money when rates are good. Our customers have a little bit of flexibility there, but it's much more, you know, they need, they need to send money regularly, and so are gonna have a little less movement around, FX rates. And that's gonna be further muted by the fact that, we have that, you know, portfolio now of 170 countries.
Maybe you can touch a little bit around the moat, around the business. I mean, how should investors think about the threat of new entrants in this space? And, you know, when you think about the moat and the barriers to entry, what are the hardest parts of your business to replicate?
Yeah. I think there's... I mentioned all of those areas, that ultimately either build or erode trust, and all of those have a structural advantage with scale to serve customers better and to build a more differentiated product. So I'll let you choose, Will. I'll give you a menu of options because we don't need to talk about all of them because we don't have time. You want to talk about localization across 4,800 corridors? You want to talk about payment acceptance, KYC? Do you want to talk about fraud, compliance, or do you want to talk about the disbursement network?
Wow, so many options. Like, I'd like to hear about the fraud and the compliance.
Fraud and compliance. Okay. So, when you think about fraud and compliance, our folks, well, there are also folks listening in, but so I'll start at more of a one-on-one level. If you think about the fraud vectors that we face as a money transmitter, fraud is a whole industry where stolen identities from another site that might have been compromised. If you have identities that a fraudster has identities that they have actually acquired, then they want a way to liquidate those identities to be able to cash them out, so to speak, right? If they have, like, a payment profile and a, and a stolen identity.
All money transmitters face some of the most sophisticated fraudsters or fraud organizations really that are trying to cash out those stolen identities, and it's incumbent upon us to do two things: One, prevent that fraud from going through, and two, because we're liable for that fraud, generally, if it goes through, so it's a variable cost for us. And then two, it's also incumbent upon us to not cast the net so wide that it puts a lot of good customers through a manual review process. And I think some of the things that we've done that get better at scale with scale is. We'll probably talk about things like, I don't know if we will, but there's a lot of things around generative AI, ML, things like that.
That's something this is more in the machine learning bucket, but our machine learning models with more scale, one, we've been able to invest in a larger and more sophisticated team, and two, we have more data to feed into our machine learning models. That increases the precision between good customers, i.e., decreasing their review rates, and between fraudsters, i.e., decreasing our fraud loss rate, and I think that's something that only continues to get better with scale. And again, we talked about one of, like, eight menus of options, but when we think about the competitive advantage of our business, all of those elements result in a more trusted, more reliable, and overall just better customer experience.
I mean, you spent a lot of time in just three quarters trying to perfect a lot of those aspects, right?
Yeah.
Yeah.
Yeah, and for context, we've been around 12 years. A lot of companies went really broad, really fast. We focused just on U.S. to Philippines for a year, or no, sorry, not for a year, for several years. Then we launched, U.S. to India second, then we launched U.S. to Mexico. We're talking like, I don't know if it was 4 or 5, somewhere in that years range of the 12 years journey. And I think that by doing that, we got a lot of these foundational things right. We got a way to view the business on a de-averaged corridor-specific level, both from a unit economic and from an infrastructure standpoint, and I think we're getting the dividends from that early focus. Even though in the early days it actually made us grow slower because we didn't get some of the kind of like, less intentional and scalable organic growth, we're now getting the benefit of that because I think we got a lot of those systems in place earlier.
So let's talk about new corridors then. You know, what are your plans to add new corridors? What's been kind of the pace of new corridor additions? And, you know, I think you mentioned on the earnings call this quarter, significantly higher growth outside of the U.S. It seems like you were highlighting some of the diversification of the business. Are you starting to see economies of scale as you add new corridors?
Yeah. So if you look at, just to kind of give you a sense of when we talk about new corridors, although we should put new in quotes for this answer, which I'll come back to. We break out, you can see in our, you know, financials, we have US, Canada, and then Rest of World. And Rest of World grew 100% year-on-year, 100%, and it's a relatively large business now. It's about $200 million in annualized revenue. And the reason I put new in quotes is because we have this corridor expansion playbook, that a lot of what we're getting that 100% growth on are not new countries and corridors we launched, like a quarter or two ago.
Those are new countries like the UK or, you know, various European countries that we launched, like, five plus years ago, three, five plus years ago. And so what I like about our strategy with that focus is, the Rest of World growth that we're seeing is getting delivered by corridors that we launched, you know, again, years ago. And we've launched new corridors just in the last few quarters, like UAE, that really haven't come online to a materiality point yet. But just like the UK and Europe has now, because we planted those seeds quarters and years ago, we have kind of a path for continued growth in the future. And I mention UAE just as an example. There's a lot, we don't preannounce countries that we've launched. There's a lot of countries we aren't even in yet, which I love, and we're doing it in a really intentional, methodological way, which is how we built the business from day one. And that's what excites us if you look at, and that's how we have delivered the 58% CAGR since 2020. And revenue CAGR since 2020. And what excites us about the future is we've got this playbook that works, around, you know, launching and ramping new corridors.
And you're kind of getting into my next question around, like, what the cohort curves look like. You make these investments 3-5 years down the line, you start to see, you know, this incredible growth internationally. What does the cohort curve look like on a new corridor? How long does it take to ramp up, and are you seeing that accelerate over time?
Yeah. There are definitely patterns in terms of what, you know, new cohorts look like, but across different, you know, countries and corridors, and so we haven't seen a lot of change. We, I think, are very good at really understanding the unit economics of the business, meaning we understand the customer acquisition cost, we understand lifetime value, we understand all the subcomponents of lifetime value in terms of what's the profit per transaction, cumulative profit per transaction, what's the monthly active rate, the transactions per active on a monthly basis. All of those things, you kinda get early indicators on, and we have patterns now across, you know, the 4,800 corridors to where some of those early indicators are pretty predictive of lifetime value. So we've got a playbook again that we can kind of roll out, launch, ramp new corridors pretty effectively and efficiently.
Got it. Maybe if we switch to some of the network enhancements that you guys have been making. I think revenues grew 49%, transaction margins expanded over 400 basis points, so you're starting to see some of the benefits of scale, higher network efficiency. What are the biggest longer-term opportunities to drive down the transaction costs and increase transaction margins?
I know I probably said scale, like, 34 times so far, but I do think that it's important, before I say scale again, to talk about how, you know, remittance businesses are like a lot of other payments businesses, that when you get scale, there starts to be a lot of leverage in the business. And that applies also to your question around the, you know, transaction expense side. So if you look at our transaction expenses, collecting funds from customers, meaning debit card or bank account, disbursing funds, so cash pickup, bank deposit, and mobile wallet, fraud loss, which I talked about, given that you chose it from the menu of options.
Yep.
Customer support, those are some of the variable costs that make up what we have been able to, to your point, the 440 basis- point increase, especially around pay-in, payout, and fraud. I'm trying to think of a way to make it more real, but when we started the business, because money transmitters are in a higher risk category, it was hard to get a corporate bank account. It was hard to get anybody to be our payment processor, and then the fees we paid were astronomically high. Now, as a business doing tens of billions of volume, we can go to our pay-in partners and negotiate aggressively our cost down, both on behalf of us as a business and our customers. Same on the disbursement side.
We often negotiate tiers to where, as we hit certain number of transactions per month, we get discounts in terms of the amount that we pay per transaction. On the fraud side, more data, as I mentioned, better machine learning team, all of those things drive down our fraud loss rate. And that's where you're seeing some of the leverage on the transaction expense line item, which is again, a benefit of scale, but to make it more tangible, those are some of the things that are examples.
You know, I think payments geeks like me like to talk about cash- to- card tailwinds in the space. You know, when I think about remittances, a lot of the money is still paid out in cash. You know, have you seen some of that shift towards more electronic payments in emerging markets? Has that been a factor in driving down transaction costs, or is that still more on the come?
Yes, we have seen some shift to more digital disbursements, but it really depends on the country. And we say digital disbursement, we mean bank deposit, or we mean mobile wallet disbursement, and that's great. It drives down, it drives down the cost per transaction because you're not having to pay a physical agent to disburse cash. It's more convenient if there is the right mobile wallet or bank account that has the right merchant adoption, the right things that customers can do with that payment, that store of value in the country where our customers are sending money to. But a very significantly on the market. Like, when I started the business 12 years ago, I was living in Nairobi, Kenya, and I saw M-PESA, and I saw how transformative the mobile wallet M-PESA was in Nairobi.
I kind of thought, "All right, well, let's start this business, and we'll send money to only mobile wallets across the globe." Well, it turns out the world's a big place, and regulation, interoperability, a lot of different things hinder specific countries from adopting digital disbursement. Some have had, you know, rapid growth. People don't even talk about, like, WeChat Wallet or Alipay as, like, mobile wallets. But obviously, if customers wanna send money to China, one of the ways that they'd want to disburse is our integrations with those partners. Kenya is an obvious example, Bangladesh with bKash, but there's also a lot of, like, Latin American countries that are predominantly cash-based.
So, you know, we can say, "Hey, let's send money into a digital wallet and or a bank account," but if you're a customer's loved one, they're sending money, so you can't really do much with that until you actually get cash out, and that hasn't really transformed some of those economies. And so what we're good at is getting customers funds the way they want to receive it, whether that is 4 billion bank accounts, 1 billion mobile wallets, over 400,000 cash pickup locations, door-to-door delivery, which is popular in some markets. And to the extent it becomes more digitized, great, and to the extent that some of the, you know, legacy ways of receiving money in terms of cash persist, we're really good at that as well.
Yeah. What about the direct integration strategy with local banks? I know that's been like an ongoing initiative over several years. Where are you in that journey? And, you know, do you see the benefits of that immediately, or does that lay the groundwork for when that digitization occurs?
Yeah, we—Again, another benefit of scale is when we were subscale, we'd have to use aggregators, global aggregators, because we didn't have the team and sophistication to be able to go to what I'll call the last mile. And when I mean the last mile, like, we maybe would have gotten an aggregator to give us access to local payment rails or to various banks and local payment rails in India, okay? As we've got more scale and sophistication, the number of new integrations we've done in India with... I don't know if I should name specific names, but some of the largest, both public and private banks in India, that wouldn't even talk to us when we were subscale, now not only wanna talk to us, not only wanna integrate with us, but we have our own APIs.
We have systems and processes that get those integrations done very quickly to where instead of going to an aggregator or instead of going to, like, the first bank we partnered with in India, that gave us access to local payment rails like NEFT or IMPS, or local Indian payment rails, but it was via one bank. We now are partnering with a wide range of banks directly, which means we're integrated with their core banking systems to where we can do things like account number validation, name validation. It can reduce the number of errors in terms of a customer entering information. Or if a bank goes down, which emerging market banks do, we get real-time updates. We can warn customers, tell customers about rerouting their funds via other options, to where, again, less friction, more reliability, more trust.
That applies to both digital disbursement, i.e., banks and telcos/mobile wallets. It also applies to cash pickup, but we are weighting our investments towards digital disbursement, and the speed and reliability and ease of doing that because, I think that that is, you know, where the future is headed. We can bet on the timeline, but that's an important- gonna be an important disbursement method for, you know, decades to come.
Got it. Maybe we can talk customer acquisition. You've seen significant improvements in customer acquisition costs, yet another bucking the trend of some of the bear cases that were out there at the time of the IPO. You mentioned seeing LTV to CAC higher than the 6x that you saw at around the time of the IPO. Talk about the sustainability of that?
Yeah. So yeah, we're really pleased with the fact that our customer acquisition cost has come down significantly, and our... The number of new customers that we've added for the last 2 quarters have been record number of new customers, and the reason for that is twofold. One, we have a marketing playbook and marketing platform that has worked and continues to work well, and I can talk about what that—what I mean by that. Feel free to please ask a follow-up question if you wanna know more about what I mean by that, but that's one, continuation of existing strategy that's worked. But the second is we provide a more reliable and trusted service, and we have, you know, 5 million quarterly active users last quarter. Our customers very much are helping us build a brand and word-of-mouth.
We do some top-of-funnel advertising, but a brand, in my view, is a promise when delivered, creates preference. And I think we are delivering a very trusted, reliable product that creates peace of mind with our customers. And more and more customers are now saying, "Hey, you can trust Remitly. It's a great, great option. You don't need to go to that local cash pickup location. You can trust them with your information." And because of that, I think you're seeing that dual benefit of lower customer acquisition cost while having record high new, new customer additions.
So you mentioned some top-of-funnel advertising. I know that's been a focus in the back half of the year. You mentioned making some kind of brand-oriented investments. Can you talk about, you know, how you think about payback on these over the next several years and, you know, how the brand is resonating today?
Yeah. I think that we tend to be pretty analytical, data-driven, unit economic marketers, and so to some extent, that's held us back from doing, like, any sort of immeasurable, or less measurable. You can actually still measure if you do a lot of, like, offline brand advertising in a specific geography, and you can kind of ring-fence what's the return on that. But that's just less our DNA. Different companies have different strategies. Ours is pretty quantitative from a marketing standpoint. So because of that, we know that there's opportunities not to dramatically change our marketing strategy, but to add a little bit more top of funnel.
As we add more top of funnel, and as we have added more top of funnel, which we started to do, we advertised in the London Tube, we advertised, you know, across, you know, I think it was buses and various things in Sydney, Australia. As we've done that, what we've seen is, you know, improved. It's part of why, you know, even things like our CAC has improved and the number of new customers has increased, is because I think some of that is that top-of-funnel awareness is translating into more efficient, more efficient and effective middle and bottom-of-the-funnel marketing. That being said, you mentioned payback because some of that you'll see immediately, some of it will be a little bit longer. But what I'm encouraged by is that we are seeing some immediate impact from the brand advertising that we're doing-
Yeah.
because, because it will, I think, pay dividends for quarters and years to come as well.
That's great. I wanted to ask just about the digital advertising environment. I mean, I guess the one thing outside of your control would be just market pricing, and I think the guidance, and it assumes some amount of normalization of the digital ad environment. Just how do you think about that as a risk to customer acquisition costs? And what are some of the ways that you can kind of tweak and adjust and maintain where what you've done so far?
Yeah. I think that a lot of what I mentioned, what I like about what's improved our overall CAC and number of new customers, is the fact that a lot of those things are within our control. The brand is continued, like, structural advantage. The marketing platform and playbook that we've rolled out is, I think, something that we continue to have a structural advantage around. So you will have some fluctuation around, like, what's the competitive advertising environment. But I think most of what we've delivered has been, you know, in our control, which I appreciate.
Got it. You posted record customer additions in, you know, the most recent quarter. Like we just discussed, you're kind of ramping up advertising and brand marketing. You know, how do you expect. I mean, do you think this level of 600,000 is a new baseline for the company to grow at over the next couple of quarters, given continued investments in go-to-market?
Yeah, I think that, you know, we, we don't look internally as much. I think 600,000 probably refers to, like, quarterly active users this quarter versus-
Yep.
Last quarter.
Exactly.
The important thing to recognize and what we look at internally when we're looking at cohort curves, is that, different customers transact different quarters in different, you know, months and different times of year. Some customers transact every couple of weeks. Some customers just send money around Christmas or Eid or, you know, whatever holiday they're sending money back for, just tuition, things like that. That's one, just caveat, but that's a little too in the weeds. The broader point to your question is, I think that, some of the structural advantages that, that we, that we have, we're really excited about in terms of the word of mouth, in terms of the marketing platform we've built. And so obviously, I can't say like: Here's how many new customers we expect to add in the future. But I would say that we feel good about the overall fundamentals of the business, the fundamentals and structural advantages we have as we've achieved more scale, a better brand, a larger geographic footprint, a marketing platform that works. You know, that's what's delivered our success to date, and remains unchanged.
So you've also delivered a lot of success on the profitability side. We're talking about it, you know, this is kind of the year of emerging into consistent profitability for the company. You've put a nice margins year-to-date, really strong customer acquisition trends. How do you think about that balance between profitability and growth over the next several years?
Yeah. I think that, we are lucky in the sense that we've been able to deliver, you know, really rapid growth while also seeing leverage on the, you know, bottom line, $20 million in Adjusted EBITDA last quarter. When you looked at what we guided to for the rest of the year, I think we're striking the right balance between, continued growth, not only this year, but making investments in terms of like bringing in new customers, which you can chart out in terms of how we predict revenue in the future, and the cohorts that we're acquiring to give us confidence, you know, to give us room to be able to acquire the right number of new customers in 2023, to give us confidence in our 2024 and 2025, you know, guide. Because we are very much in this for the long term. But even while we're doing that, what we're really happy about is we're able to show more leverage in the business, not only on the marketing side, but I think we've been pretty disciplined on the headcount investment side, too, which are the two main areas that we invest in addition to the variable costs that we talked about.
Yeah.
I think that's unique in this market, and it's something that we're really proud of and we'll continue to focus on. One anecdotal story is during the kind of heyday of, you know, I think where a lot of companies lost their way in terms of hiring and losing sight of that, when capital was a lot cheaper. For a variety of reasons during that period, for every new corporate headcount, which means everything except customer support, I was personally approving every new headcount that we were hiring. I'll give you context. I'm not like I'm a founder micromanager, but by doing that, I think it drove more discipline and a little more friction to make sure that we were investing in growth, but we were investing in an intentional way to not get ahead of our skis.
I think that's what we'll continue to do. I obviously don't do that anymore. Got an amazing, you know, CFO, set up the right, like, systems and processes. But I think that, the DNA of being disciplined about investments, still making the investments but being disciplined is part of who we are.
You talked about a founder mindset. I mean, this is a tech conference, you're not supposed to talk about stock-based comp, but I, I think you've always taken a pretty thoughtful approach to it.
Yeah.
I'm just curious how you think about long-term margins in the business and, you know, how you think about the level of stock-based comp, and-
Yeah
What, how do you kinda differ from other companies' approach there?
Well, the first is, if folks don't like questions about stock-based comp, then I differ on that. I actually really appreciate questions about stock-based comp, truly and genuinely, because-
I teed it up for you.
What's that?
I teed it up for you.
Yeah, but I don't know if you knew that, so I appreciate that. So I care about it because I'm, you know, equity holder just like anybody else. And I look at equally as much at dilution in stock-based comp. And I do, on the one hand, really want to emphasize that, like, our business, we do, like, no cash-based bonuses. We're an equity weighted, we have an equity weighted comp philosophy, so it's a very important part of what we do. And also recognizing that how we manage our existing team in terms of performance, 'cause you really want to double down and make sure that you're incenting the high performers for the long term, by giving them aligned incentives with investors.
I think Amazon's done a pretty good job of that as an example, and also limiting cash, including myself, by the way. Like, this is all public. I make $290K base. I have no cash-based bonus, and actually, the last couple of years, 'cause I'm a founder and we've been trying to manage stock-based comp, the last 2 years I declined my stock-based comp. I say that just as a signal, because I wanted to be able to, especially when there was more volatility in the equity price, I wanted to be able to both manage stock-based comp for investors, as well as double down on some of those high performers on our team, to make sure that they're able to participate and be locked in to some extent for the upside in terms of the journey that we're on.
And so I think that's my view strategically. I think more, financially, I think that Hemanth, our CFO, answers this question better than I do in terms of, like, you say, moderation in terms of stock-based comp. But internally, we probably talk about it even more than we do externally, because we've got to both lean into our equity-based comp philosophy and strategy while managing that number, because it's an important, it's an important real cost of the business.
Got it. Helpful, refreshing perspective. Maybe talking about ancillary products a little bit, you know, their, you know, core products, still remittance engine. You know, you had a, you've had a kind of strategy to kind of design and think about products that might make sense around the periphery of this product. What's kind of top of mind right now for other opportunities around the remittance?
Yeah, so we have our complementary product strategy, which we don't share the details of yet. We have a pretty focused strategy. There's two other areas that we're investing in in addition to sending money, i.e., remittances, and we're really excited about other pain points that we can solve specifically for our customer base that are very complementary to sending remittances. The only reason we don't talk about it broadly is because as a public company, but even as, like, a large, like, we have 3,000 employees internally, right? Whenever you're working on new products, you want to give the team that's working on those new products the ability to focus more on customers than stakeholders because that's where the value is actually going to be created. And then, as those businesses get to more scale, we can talk about, you know, more of the specifics externally, but we're very committed to it, very excited. I think we're investing a prudent amount, for our stage and size. You can see the leverage in our business, that we're being prudent with capital again, but we are investing in those areas, and we're excited about what's to come.
You just said, being prudent with capital. Last question, just on capital allocation. You're trending towards sustained positive free cash flow, clean balance sheet. How are you thinking about capital allocation opportunities?
Yeah. I think that, we, as you said, are in a good place from a balance sheet perspective, from an overall, you know, Adjusted EBITDA, which the main bridge between Adjusted EBITDA and GAAP net loss is stock-based comp, which is a very important but not a cash-based expense. So we are well capitalized, is the point, from a cash standpoint. And if you look at the opportunity of what we're going after, 2% of the overall remittance market, just starting on complementary services, in 170 countries, but a lot of geographies we haven't even launched yet. And then finally, you know, really reinvesting in our platform to continue to create a differentiated and trusted platform and customer experience. Those are areas we want to be able to continue to invest in, and so we'll do that while maintaining a strong balance sheet, while, you know, continuing to show, you know, appropriate leverage over the long term. But we're, I think, pretty intentional about how we allocate capital towards the very big opportunity that we can go after.
You've done, I think, one or one deal, one since you went public. How are you thinking about M&A opportunities from here?
Yeah. You know, organic has been our, our core strategy. We did acquire Rewire, which helped us expand to the Middle East, specifically in Israel, and helped us accelerate elements of our complementary new product strategy with a company that was very much culturally aligned. But we have a high bar for any sort of, you know, M&A or inorganic. I think we're always looking and assessing deals, but I think it's appropriate to have a high bar, and for us at least, our strategy is organic, the foundation, and then if we see opportunities that, you know, complement or accelerate our strategy that are out there, then we'll look at those.
Great. Well, I think we're out of time. Matt, thanks for joining us today.