Morning, everyone. I guess we'll get started and let people stroll in as they gather their coffee. I'm David Scharf, research analyst at Citizens. I've been covering the remittance industry for longer than I can remember. And it's a pleasure to have Remitly Global back with us and Matt Oppenheimer, who is not only CEO but founder. And you know, I have no reservations saying this is hands down the best secular story in my coverage. When you think about disruption, what Remitly has done is really been remarkable in a decade. But let me turn it over to Matt. You know, I always like to start it by just you know, giving you the opportunity to take a minute or so to give a commercial. You know, maybe the origin story of the company.
Yeah.
Go ahead, and then we'll go to Q & A.
Sure. Yeah. So our vision, which everything in the company ties to, is to transform lives with trusted financial services that transcend borders. And so a lot of what we'll talk about today is gonna all ladder up to that vision. The founding story, as David mentioned, I've been to close to a hundred countries, lived and worked on three continents. I saw how hard it was to send money internationally, but I saw how hard it was for a lot of my especially Kenyan friends, because I was living in Nairobi, Kenya, when I started the business about 14 years ago, and how important those funds were to their day-to-day, you know, living expenses. And so moved back to the U.S. about 14 years ago, and we've gotten to some exciting scale and size.
I think we're the only digital-first remittance company that's over $1 billion in revenue. Last year, our customers sent $50 billion through our platform, growing 30%+ at our scale and size. We serve close to 7.8 million quarterly active users in Q4. So amazing kind of scale, and we're only less than 3% of the $2 trillion that's sent every year. As we often say internally at Remitly, we're just getting started, and it feels like that more than ever, 14 years in.
Great. Great. So, I'll tell you what, you know, I may have done this with you a year or two ago, but I want to start out with what might sound like a simple question, because to this day, I still have some people or investors who say, you know, come on, I keep getting Venmoed by my kids all the time. You know, I've used PayPal for 20 years. It started on eBay, or I know somebody who sends money with Zelle. I mean, doesn't everybody move money? What can possibly be so difficult about it? And therefore, you know, competitively, this has to be kind of, you know, perilous. So can you spend some time? Because I think it's really worthwhile educating people w hy cross-border remittance isn't as easy as maybe some people think.
Yeah. It's something I've learned over the last 14 years. Even when I started the business, like a lot of investors, to your point, I didn't have nearly an appreciation of how difficult it is to send money across. We do 170 countries, 5,100 corridors, which means country pairs. And when you look at what creates the complexity, it is very different than domestic transactions because we have to not only collect funds from customers across a wide range of different types, whether that's debit card, bank account, Klarna, Sofort, iDEAL, a lot of European payment systems. We then have to disburse funds across. We now do 4 billion bank accounts, 470,000 cash pickup locations, 4 billion bank accounts, and mobile wallets. So we have to build out that network.
In some ways, we're reinventing those international payment rails because we do direct integrations with banks and other financial services institutions and emerging markets. And then a lot of folks focus on the money in and money out because it's the most tangible, but everything in between, treasury, cash management, fraud prevention, compliance, all of those things are incredibly complex to not only get right to prevent bad actors, but also maintain a fast and seamless customer experience. And we're really proud of the fact that because of the scale and size that we have, we've been able to reinvent a lot of those different aspects of sending money internationally, which is why 90% + of our transactions go through in less than an hour. 95% + do not require customer support, and it is getting better every day, but it is incredibly complex.
And then the last thing I'll say is you overlap that with our customer base. And I think all financial services require trust, but we're not in the business of lending out or giving out money. We're asking customers to give us their name, address, date of birth, tax ID or Social Security number in the U.S. context, their payment information. We're asking them to then give us a big percentage of their hard-earned money. And because of all the complexity I just mentioned, they've probably had a bad experience, or one of their folks in their communities has had a bad experience with funds being delayed, even though that company had good intent.
They didn't execute brilliantly. They didn't have the scale and size and digital-first approach that we have. And so the importance of trust with our customer base, compliant, combined with the difficulty of delivering that trusted, seamless instant experience, creates a huge opportunity if you get it right. And that's what we are doing. But we're not gonna be satisfied until that 90%+ delivered in less than an hour gets closer to 100% a nd I think that we can uniquely do that.
Got it. So since this is a technology conference, what, why don't we start on that? As you just described, whether it's, you know, regulatory, compliance, fraud, payment information, the nodes, it's not an easy task. Can you talk about what technologically in your infrastructure that you've built over 14 years that you would consider to be either differentiated o r equally as important, just put a number on how many years of a head start you have if I wanted to get into this business myself with some other e ntrepreneurs?
Yeah, so I'll talk about the technology aspect and then the scale aspect because both are relevant. From a technology standpoint, there is, you mentioned just secular shift that is happening from physical cash locations being used to send money back home to leveraging a digital device to be able to send money seamlessly across borders. That transition has taken longer than some other disruptions because of the trust element that I mentioned. Folks know that physical cash location and that individual in their community that they can trust. What's exciting about once you actually take a digital approach is that you take a lot of costs out of the system because you don't have to pay that physical agent because we have a relationship directly with the customer.
And so the variable costs per transaction are less as opposed to paying that agent, which ultimately has that trusted relationship. And you go through the entire, when you talk about the technology platform, things like our transaction losses are less because of the machine learning algorithms that we've built, to prevent bad actors, but also enable a seamless instant experience. The integrations we've done in terms of building out that network, what oftentimes folks do is they start working with what are called aggregators, meaning you do one endpoint and then that endpoint gets you access to a lot of different emerging markets. For us, we started that way, but then we've gone direct into so many different, countless, what we call disbursement partners. That not only increases the reliability, but it drives down the cost.
That has to be done in the right way in terms of how those APIs and agreements are done with those disbursement partners in emerging markets. All of that results in a technology platform that is very differentiated from the way that, I mean, even 20, 25 years ago, you've been following this for a long time, there would be a fax that was sent to the disbursement partner that then would fax that to the end agent that had to then disburse the funds. It was expensive. It had delays, all of those things. That's the technology aspect. You add the scale, and that's where it's getting incredibly exciting. One of the things that we shared in our Q4 earnings is a flywheel in the end of the deck.
I encourage you to look at it because we've thought in depth about, you know, it's easy to say scale, but if you look at the center of the flywheel, the output is growth and ultimately free cash flow. With our scale and digital-first approach, that enables us to lower costs. I can talk about a bunch of examples there, but lower our variable costs. That enables us to offer better prices. That also enables us to offer a better customer experience because of a lot of the data and machine learning and other elements that I mentioned. That drives more customer actions. That continues to drive high retention.
And the flywheel is spinning not only when it comes to our growth and free cash flow on a per-customer basis, but the word of mouth now is incredibly exciting because just as historically there was that trusted relationship with the agent. Increasingly as customers love using our platform, they now are saying, "You've gotta try Remitly. It is fast. It is seamless. It's trustworthy. It has a fair price." And that flywheel is spinning in a way that's incredibly exciting, especially when you put it in a context. Again, we're less than 3% of the market. And there, while it may seem foreign to us, a lot of remittances are still sent via cash. And so as this digital-first player with scale that has this flywheel spinning that has word of mouth, we're really excited about what's to come.
Good. So, you know, that's a good segue into maybe the next topic, which is just better understanding who your customer is b ecause, you know, one of the things that I've kind of come to appreciate over the years covering remittances is it's, you know, trust is a word that kind of gets thrown around t oo loosely, particularly in financial services. But this is somebody who's been very often leaving their family, going to another country to get work. It's been, you know, they may be working on a construction crew all day, you know, but they wanna make sure that money gets back home, so, you know, building up trust and systems that guarantee that money's going to get there, obviously is not something that can be just kind of manufactured overnight.
You know, that being said, you know, the remittance industry has also been around for a long, long time, so can you talk about, number one, what the requirements are to send money r emitly? Because so much of this industry is historically walking into an agent, putting cash that you just got paid maybe o ut of pocket on the table and knowing it's gonna get to your family the next day. What are the requirements to actually fund, you know, a remittance at Remitly? And if you can talk also more broadly about just how big the market really is when you define b anked versus unbanked and m aybe some of the trends that are taking place there?
Yeah. So our customers tend to be in the country for a longer period of time. They link their bank account, or, well, they have to enter in their, as I mentioned, name, address, date of birth, tax ID, but then they link their bank account or their debit card to be able to originate those funds. And then they can send money to a wide range of disbursement options that I mentioned, including cash pickup. But because our customers have to go through bank KYC, they tend to have been in the country longer. And it's a wide range. Like you said, it could be that construction worker, but it also could be, you know, somebody who's working in the nursing industry. It could be somebody who's sending money back to India that works in, you know, technology industry. It could be a wide range of types of customers.
What's interesting is while it is harder to build trust with certain types of customers. I have been, quite frankly, surprised via anecdotal stories how trust matters with everybody who is sharing their identity and their payment information. And an example of that is I was interviewing a potential board of director a couple of years ago. And the board of director, this is a person who's like been enormously successful. And the board of director on the call, she was like, "I was gonna use the product, but I, but I, but I really wanted to make sure like it worked. I wanted to talk to you as CEO. I wanted to make sure it was legitimate." I'm like, "You are incredibly successful, incredibly well like banked, incredibly savvy from a technology standpoint." And for me, that was a reminder that anytime somebody is sending money, especially internationally, they pause and say, "Can I trust this institution to be able to actually get it back like they say they're going to do?
Got it. So obviously you need a funding source though.
Yep.
It's not a cash business.
Yep.
At least on the sending side.
Correct.
So maybe if you can talk about how you see your, you can call it TAM, you can call it target customer kind of evolving because Remitly started out very heavily U.S. to India, U.S. to Philippines. Probably these are senders that worked in industries where, you know, they may have been a little more affluent or higher income l ikely to have bank accounts or debit cards, a way to send money. You know, what are the trends you're seeing in other corridors in terms of senders becoming more banked b ecause ultimately, i s that what drives the business, not just customer acquisition, but getting more people able to use the service?
Y eah. I would say that, if you look at the serviceable, addressable market of the number of customers that have access to, you know, bank level KYC and store of value, it's very large. And so there's lots and lots of room to continue to grow in that segment. And the other thing I like about our business is we've continued to diversify geographically. And so we originate from about 30 countries: U.S., Canada, Europe, Australia, New Zealand. I could keep going, but those are where funds largely originate from. And unlike even four years ago where 25% of our business was outside of the U.S., it's now 35%. It's continuing to diversify both on the origination side as well as on the disbursement side.
So it's a very, very large serviceable, addressable market in the markets that we're in. W e're continuing to add markets. One of the things I said in our last earnings that is very important to internalize is we're a growth company with no shortage of growth opportunities. There's a lot of companies out there that are like, "Oh, we're running out of like, where do we actually invest or grow?" For us, we have so many opportunities to continue to invest in growth that it's a prioritization exercise that's actually incredibly hard. That is a much more enjoyable business to run.
So, staying on that topic of growth opportunities, a t the time of your IPO, I think just about all remittance volume was U.S. outbound. It was, you know, immigrants to the U.S. sending money back home. You've had an acquisition in the interim, I think maybe foreign to foreign sends or non-U.S. to non-U.S. destinations is maybe what 20% of the business now. What are the plans for diversifying geographically? And, as you think about where you wanna have a strong presence, are different corridors more profitable than others? Does that inform kind of your geographic thinking?
Y eah. Lots to unpack there. I would say when we talk about growth opportunities, it's continuing first and foremost to continue to take share of the $2 trillion that's sent from a P2P standpoint in the markets we're in. Ample room to grow at very strong unit economics that are getting stronger because customer acquisition cost is coming down given word of mouth and the effectiveness of our marketing team and product. Then the lifetime value, to go to the last part of your question, we match the CAC, the customer acquisition cost we're willing to pay based on the lifetime value in a specific corridor, marketing channel, et c. That's part of our success.
There isn't huge variances of LTV between corridors, but we can still optimize because not every customer we're willing to pay the same amount for, and we target that very intentionally, so that's number one, grow in existing markets with strong unit economics, 6x lifetime value to customer acquisition cost, then it's about saying, "All right, well, how do we leverage the platform we've built to then offer our service to other types of customers?" And that includes things like micro business, which we already have a lot of customers coming to our platform and saying, "I would like to use your product for my small business." I talked about a customer named Mary who's an accountant in the U.S. She provides consulting services to other companies for bookkeeping services. She already wants to use our platform, and we have opportunities, and we're just starting this.
So it's a big opportunity to just improve the funnel such that instead of doing KYC, know your customer, we're doing KYB, know your business. And she sends money back to the Philippines. She has 10 contractors there that she worked with because she's from the Philippines originally. Lots of opportunity to leverage the platform to expand into areas like micro businesses where we believe we have a unique opportunity to serve and win. And then the last thing I'll say in terms of growth opportunities is going back to our vision. We talked a lot about trust already, but the last part of the vision, financial services that transcend borders, that part of the vision is exciting because remittances and international payments are at the heart.
Once we've built that trust, once we have more data and information on our customer base, our understanding of them, we believe that we can offer a wider range of financial services that transcend borders to our 7.8 million and growing active customer base per quarter, and we're excited about what's to come there as well, so as you can get a sense, lots of growth opportunities. There's a whole host of things we've just crossed off the list because we're being very disciplined and focused, and I won't go through those, but that gives you a sense of, within, there's no shortage of growth opportunities where we think the opportunity lies.
Got it. I mean, it sounds like if you're 3% of the share, even of the banked share, it's still an incredibly small figure. There's just a lot of runway here.
Exactly.
So, you know what? Let's address the elephant in the room, which, I guess it's been a noisy elephant because I get asked about it all the time. But I'll just say the word immigration and you just respond because there's no need to kind of expand further. I mean, w hat is Remitly's general feeling about certain policy initiatives underway and to come?
Yeah, absolutely. First off, I like elephants a lot, very authentically. They're very wise. And so I'm glad, I'm glad you asked. I would say that, you know, we have been around for 14 years. We've seen a lot of economic cycles, a lot of political cycles, a lot of, different dynamics. And one of the, the great things about specifically international payments and remittances is how sustainable and predictable they are. From a policy standpoint, one of the things that, that gives me comfort and excitement is from a business standpoint is the fact that our customers, as I mentioned, have all gone through bank level KYC. So they're linking a bank account, a debit card.
So in the U.S. context, they're our customers have been in the country longer, and we feel good about, you know, where they sit potentially, compared to other potential folks that might be subject to deportation and other elements, and so from a business standpoint, we feel well- positioned there, then you layer on the fact that diversification, because this isn't only a U.S. component when you talk about immigration and other elements, and it gives me a lot of comfort that we are now in 170 countries, 30 origination corridors, and I mentioned some of the growth stats of how we're diversifying specifically beyond the U.S., and so that's point number two, and overall, I would say that it's something that we obviously track closely. We have an amazing policy and regulatory affairs team. But I feel well positioned for this year, especially compared to a lot of businesses that might be more impacted by macro shifts and other elements, and feel good about both 2025 and beyond.
Got it. So I guess there's a second elephant that's emerged, which is tariffs. And it's a lot more difficult to define what the impact is gonna be, certainly in the lending sector. You know, lenders are trying to assess, you know, what is the exposure of my borrower base to certain industries that might be most susceptible t o downturn. W ith respect to kind of the vertical or employment diversification of the business, can you talk about whether or not there are any industries of your senders that are very concentrated or, you know, is this ultimately tariff a big, big macro topic, but as it relates to your business, is it meaningful?
Yeah. I would say that it's a good segue from where I ended the last question, which is it's important to internalize that first off, remittances are non-discretionary. People send them back very, very regularly. It's a high use of their funds. And so it's not the first thing that a customer would cut if they were to experience some sort of financial hardship. The second component is we're diversified. So the answer is there's not like, "Hey, here's the one industry that we're highly consolidated into." If you look at like the financial crisis, in 2008, and you look at a World Bank report that they wrote, you saw that some industries, to your point, like construction, were slightly impacted in terms of remittances is what they studied. But even that, because of the non-discretionary, was less than you think.
And then you layer on the portfolio approach for a business that has our scale and size and geographic reach. And it's a benefit, I think, of being in a business that matters, that makes an impact to customers. It's not a nice to have, it's a need to have. It's a benefit of serving a customer base that is incredibly resilient. We saw that during COVID. Like a lot of our customers presumably worked in retail, restaurants, you name it. When restaurants shut down, they were the first ones to then shift to be able to become, you know, a DoorDash delivery driver or you name it. And so that is just one segment of the customers that we serve. But there is a thread amongst our customer base in terms of resilience, in terms of non-discretionary.
And it's part of the benefit of the business that we're in. It matters. And as part of mattering and getting to serve the amazing customers that we serve, we've seen so many economic cycles, and remittances are resilient. And you can see a lot of that in some of the research that the World Bank and others have done over the years. So I am watching the economy as you are, as so many of our investors are. I am glad we're in the business we're in.
Got it. So, you know, we're got a couple minutes left. I do wanna hit upon the financial performance, quickly. You know, you've used the term scale a number of times. You know, I was just looking, you are now 1/3 the size of Western Union, which has been sort of the industry behemoth for decades and decades. There's a lot of discretion between growth versus margin. You guided to very, very healthy EBITDA margins for 2025 while still growing, you know, 25%-ish. When we think about where this business could get to, at the end of the day, you can define it as maturity or just full scale, whatever. Is this inherently a more profitable, a higher margin business at maturity or at 8%-10% growth level, than the incumbents a nd the traditional, b cause we're always trying to figure out, you know, how much free cash flow does this thing throw off yo u know, when it's a, call it an 8%-10% grower?
Yeah. Well, while we haven't shared long-term growth or long-term growth and margin targets, inherently, because the business is digital, it takes out a lot of the costs that we talked about earlier. I think that fundamentally that's a business that should see higher margins, from a bottom line perspective. And I think that that's why it's interesting because if folks look at remittances, they might think of a legacy way. It's in many ways, when you look at the P&L, the structure of our business, we're much more like a software company, like a global payments company. And by taking a lot of those costs out of the system, by having that flywheel spin that gives us both leverage on the variable cost side as well as the overall OpEx side.
I haven't talked about like our virtual agent or other elements that are driving down our customer support costs. But there's so many opportunities to optimize, and we're excited about what that means, both from a P&L standpoint in terms of bottom line margin, but also from a customer standpoint in terms of being able to really reinvent, how international payments are done and pass a lot of savings to customers along the way as well.
Got it. You know, I think we've kind of run out of time here, but, you know, if anybody, we have time for one question. I kind of monopolize things too much here, but if anybody has anything for Matt in front.
You're addressing the regulatory environment, the changes that are going on in Washington. You rely heavily on KYC, but the Treasury Department just put Beneficial Ownership Rule on hold. What happens if KYC disappears? Is that a bank problem that becomes your problem, or how do you deal with that?
Yeah. Interesting question. And the question for those that are maybe streaming that can hear is, is what happens if bank level KYC disappears? Is that a bank problem? Is that a U.S. problem? I think that would be a pretty dramatic shift in how overall financial services are done. And so I think it would affect a wide range of the financial services industry. But, it's not something we see happening in the foreseeable future. And we like having those requirements because it enables us to make sure that we know who our customers are. And by knowing who our customers are, we can then be good stewards as a corporation to prevent bad actors and do things that all of us wanna make sure that we do as a money transmitter at scale.
Great. All right. Matt, thank you.
Thanks so much.