Real quickly. Guys, just wanna thank everyone for joining us again. Remitly is a name that we've been very focused on. Obviously, we worked on their IPO, and really continue to recommend the stock now just as a name that we clearly see gaining quite a bit of market share across the remittance space, and really building out capabilities across other features now, which got us even more constructive. Really happy to have Sebastian, the new CEO of the company, with us, as well as, of course, Vikas, the CFO, and Daniel on my team is gonna moderate. Guys, thank you so much for being here with us.
Thank you, Darrin.
Thank you.
Thanks. 2025 was a significant inflection point for Remitly, whether that's introducing new customer cohorts, new products, your first Investor Day. Now happy to have, you know, a new CEO sitting here with us this morning. Sebastian, welcome. Vikas, great to have you back. Maybe first with Sebastian, just simply what brought you to Remitly and here today?
Well, thank you, everybody, for being here. A few things. I think that, first of all, for those of you who are new to the payments market, it is a very large market, and so you wanna be always associated with companies where if you win, there is a very large opportunity. The payment space, as I looked at Remitly, you know, probably in our core market, it's probably a trillion-dollar market, and we're less than 4% of that. Number two, you also want to look at companies that have a great product. I don't know if you use Remitly, but my experience in obviously talking to customers love this product. Matt and the team spent 10 years building a great business based on a great product.
Number three is the unit economics work, which means the more the company scales, the better the unit economics are. You wanna also, you know, follow businesses where that trend is very, very well set. I mean, you don't want to be a part of a business where the bigger they get, the less the economics work. Finally, I'd say that you know, it's a missionary company. The founder and the company, you know, we serve a very underserved population that's overcharged, and we've built a very good business around that. We've built a massive network around the world to move money over, you know, around 55,000 corridors, which is very hard to do.
As I put all that together, I thought it was a very good opportunity. I think the world is changing with AI, as you know. We're probably gonna talk a little bit about that today. I have a science background and, you know, a bit of an AI background also, and I think that the transformation the companies are gonna go through. You know, AI for a company like ours is a huge tailwind or a huge headwind, depending how you manage this transition.
Mm-hmm.
You know, putting all that together was a great opportunity. You know, this is week three on the job, so I know what I know, and I don't know what I don't know.
Sure.
So far, it's a fantastic company with a lot of opportunities, and I think we're very well positioned into the future.
Yeah. That's a great initial pitch. You know, in your research on Remitly and looking at the job, what do you think that the market maybe hasn't appreciated about the business over the last few years that you may be able to influence or change moving forward?
I think that, you know, moving money across 170 countries and 5,500 corridors is hard. First of all, you need to build that trust. This company has built a lot of trust with that population. You could not do that overnight, no matter how much money you have. Trust is a function of you gotta have the right cost, you gotta have the right speed of moving money, and you gotta be able to do it with no defects. That takes a long time to build that. Remitly's obviously done a very good job.
Number two is, you know, I think that the unit economics of this business when you're at scale are very good. The markets are very big, so, you know, we're focused on four big segments. One is this core sender, which is people that send under $1,000 transactions. There's the second very large market, which is people that send over $1,000 transactions, different customers. There's a third even larger market, which is this business market, small businesses, individual entrepreneurs who are paying people around the world, you know, different levels of business. There's this fourth market, which is untapped, which we haven't really. We really have a lot of ideas around, which is the receivers of money.
Mm-hmm.
We send money to about 20+ million people a year who are receiving money through Remitly, and we've done very little with that customer.
Right.
In some cases, doesn't even know. We don't know how big that market is. I know there's a lot of things we can do. You know, in our biggest market, the core market, we're less than 4%, and we're sub 0% in all the other markets. The opportunity seem very, very good going forward.
A lot of opportunities, a lot of things to focus on. You know, where do you think the next six month, nine months, your focus is going to land?
Well, I think that, you know, AI is the elephant in the room for all of you. Yeah, I think every day I try and refine my talking points on AI because, you know, after what happened, you know, every 24 hours there's a little reset. I'll just give you a quick perspective, which I think is an impact for Remitly also. I put AI into three buckets. We're calling it internally the AI dividend. I think it's a good framework as you talk to other companies. There's three components to that dividend. One is cost, which is what, you know, AI will take 10 people and make them five. The most obvious starting point seems to be the software world.
We have a lot of engineers. Then you may replace software, et cetera. You got this cost dividend, which I think is a huge tailwind for Remitly. The second dividend is a speed dividend, which is how much faster can you make a product? Can you launch a product? Can you make decisions? That's much harder to measure, and you have to drive that dividend. I see a huge tailwind for Remitly. I mean, we move pretty fast, but we can move a lot faster. There's this final dividend, which is the trust dividend. Well, early on, I think. In the world of moving money or in the world of finance, we're gonna have to be very careful with the trust factor of AI.
Mm-hmm.
I don't know if you guys have used some of these chatbots and, you know, from a consumer perspective, my experience is there's a lot of good stuff happening, but there's a lot of annoying stuff happening also. As you know, trust takes 10 years to build and a full second to lose. I think that we're marching to these three dividends of AI. The cost dividend, the speed dividend, and the trust dividend. I think all three are gonna play a huge role in Remitly if you're gonna go.
Yeah, yeah.
That's great. Then moving back over to Vikas maybe. Moving back to inflection points 2025, Remitly, first year, you know, full year of GAAP profitability. Maybe talk to us about, you know, how much of that was any intentional actions that you and the team took or maybe just hitting some sort of point in terms of scale in the business that it started to flow through.
Yeah. I'd start by saying that 2025 was an exceptional year for us. Of course, it starts with growth and then profitability, and then investing for the future. If you look at just our growth, we hit a stride, you know, almost 30% revenue growth, which then enables our flywheel to move even faster. With that, we were able to leverage across every single line, expense line of our business, right? That ultimately falls down to the bottom line with free cash flow. If you look at our free cash flow, we were able to convert, you know, more than 100% of our EBITDA into free cash flow. Those are two sort of bookends, if you may, with growth ultimately driving free cash flow per share.
Within that, if you look at our EBITDA, we were hitting 17% almost. From an EBITDA margin perspective, it increased 500 basis points year-over-year. If you're to highlight, you know, a couple of points there, the first one was in terms of marketing. You know, with the product and the trust that Sebastian just talked about, we were able to drive much more word of mouth and also much better targeting, data-driven approach to doing, you know, performance marketing, et cetera, which enabled us to leverage more than 250 basis points year-over-year from a marketing perspective.
Now all of this ultimately comes down to the flywheel, which we talk a lot about, which is once you can deliver great customer experience, that creates more customer actions, that creates better unit economics, which then you can funnel back into the business with investing for customer experience, and then just that keeps going. I'd say that 2025, as you rightly highlighted, was that pivotal year where we were able to show scale transforming into margins.
Mm-hmm
... margins transforming into free cash flow and then, of course, investment.
That's great. I guess, you know, a lot of that starts with the strong growth that you've seen, you know, beginning from a top-line basis before that can flow through. Let's talk a little bit about how the assumptions play out for 2026. I mean, you exited 2024 at 26% top line growth. We're looking at 19%-20% for 2026. Can you maybe unpack a little bit about that and maybe with a particular focus on the new product contribution within that?
First of all, we're really excited about 2026. Our business is very interesting, where a lot of our revenue for the next few quarters is already what is driven by our prior cohorts, right? As we have said, 80%-90% of our revenue is coming from the past cohorts, and that gives us a lot of predictability and strength in how we run the business. Beyond that, a few important points. The seasonality obviously is into our business and timing of holidays, for example, has an important effect. If you look at 2026 and Q1 specifically, Ramadan has moved, call it, two weeks ahead compared to what it was last year.
There's, I'd say, a shift from Q2 to Q1 because of that. That would be the first point. The second, if you think about remittance stacks , that's a nice tailwind for us and something that we just coming into the year did not know exactly how much it will drive-
Mm-hmm
...has been a good tailwind for us thus far. Now, of course, there is a limit to how much you get and, you know, how long you get that. something to keep in mind as we think about the seasonality. The last point I'd make is if you think about the full year, it has an H1 and H2 seasonality as well. As you pointed out, we have, you know, growth accelerators with the new products, customer categories, and they scale over time.
Sure
Clearly, H1, H2, we're, I'd say that the guidance that we gave, 19%-20%, you know, I'd say that the second half is more of the 20%.
Mm-hmm.
That gives you a view of the year. Overall, really confident coming into the year, really a strong start to the year, and very excited about, you know, where we are headed.
That's great. If we could maybe expand that and look longer term to the 2028 Investor Day targets. You know, I think one of the particular areas of focus for investors coming out of that was, you know, the core business maintaining a consistent high teens growth rate. Maybe talk us through the confidence levels there. I would assume a lot of it comes with these new cohorts and-
Mm-hmm.
You know, splitting the product, but if you could.
Yeah, yeah.
Discuss that.
You know, again, very confident about the medium-term, you know, targets that we have set. As a part of that, as Sebastian highlighted, we think about these four customer categories. The first one is the core sender. This is an area where we have already high strength, and I'll come back to that, like what will be the key drivers, which is sort of the main part of the question. Beyond that, if you look at the second bucket, which is the high-value senders, people sending more than $1,000, this is something that we have started focusing more in the recent quarters. We've already seen a lot of, you know, really strong signals from there. We were able to even sort of double-click and say about $10,000 is the very high amount sender.
Again, we're putting a lot of focus and emphasis, a lot of untapped opportunity there. Beyond that, businesses and receivers. Huge categories, $20 trillion TAM, and you know, very, you know, low share there. A lot of upside on that. Now, going back to your question around the core senders. There's a lot of opportunity and upside even within the core senders. Let's start with more short-term remittance tax as well as the offline to online. You know, clearly a very structural benefit that we have been getting over the years, and remittance tax creates a nice catalyst and inflection point for us.
Mm-hmm.
As I said, you know, we're already seeing good signals there. That would be the first point. The second, if you look at the market share that we have, even within this category, which is we are calling that to be, you know, the one that we have strength, is still very low. There's a lot of low-hanging fruit even in that core sender category where we can keep winning and keep expanding. Overall, you know, as we talk about, it's like no shortage of growth opportunities.
Sure.
You know, with you know, just a lot of focus, velocity, continuing to gain speed and trust, we feel really confident.
Yeah. If I can follow up with one more on the high-value senders and, you know, most people may know, but it's not just a marketing effort. Like, there's technical aspects to raising the limits in certain corridors. Where are we in that corridor penetration of allowing that? Is there still a lot more room to grow, especially maybe some major markets?
Absolutely. I'd say room to grow both from a send limit perspective.
Mm-hmm.
As well as geographies where we have enabled that.
Okay.
If you take, for example, we generally start with our main corridors and start expanding there. That's the effort. There's a lot more that we can do on the send limits across geographies. Now, the reason why it's complicated is because it's both compliance as well as working with partner ecosystem to enable that. Again, seeing good results, we'll continue to do that. The second one, which you highlighted, is with regards to even in terms of just the send limits themselves. Right now, we've talked about going to $50,000, going to $100,000. That would be, you know, a lot more opportunity beyond that also.
Mm-hmm.
Again, feeling a lot of leverage there.
Awesome. Sebastian, as we talk about these longer-term targets, could you maybe tell the audience, were you involved in any way with the longer-term planning and the Investor Day process?
Yeah. I got exposure to the immediate term numbers. I think, Vikas, I think we're very confident on being able to execute those. I'm starting to turn my attention to the longer view of this. I think there's enough opportunity there, and we have enough ideas that even, you know, just, you know, executing on some of that is going to have a very good impact on the long-term opportunity of the company. Yeah, I think we feel really good about the trajectory we're on. We feel very good about the ideas that we have. We feel very good about some of our mature products that can grow. All in all, we feel we're in a very good place.
That's great. I thought you had a very interesting quote last week to bring the discussion back to, you know, efficiencies and AI saying, "This is the most human Remitly will ever be." I would love if you could take a minute to-
Yeah. I may wanna walk back.
Unpack that.
Walk that. It's not a very friendly quote, but I think it applies to most of us in life, I guess, and maybe for a lot of companies. I really do think that we have a lot of. What I meant was that I think, so you gotta give me a break 'cause I may be wrong here, but I think Remitly can be three or four times the size it is today with the same number of people it has today. That's the long-term view. Why is that possible? Because we're a tech company, and we build products. When you build products, you're writing software, you're releasing products, you're fixing products. So as AI makes that factory, this is after 50.
The software factory was basically the number of people you had times the number of hours in the day. That's been the 50-year model of building software. That has been completely disrupted. That allows us to do a lot more with a lot less. It's kind of a. You know, it's an optimistic way of saying I think that we have a lot of tailwinds in the speed and the ability to build stuff for customers.
Mm-hmm.
Without needing to deal with all the complexity of scaling people. If you look at the history of most companies, you know, the complexity of getting large is not the product, it's not the technology, it's usually the people. I think that most companies over the next few years are gonna start to realize that there's gonna be an alternative model there.
Sure. We have a lot of new products at Remitly, a lot of, you know, You talk a lot about the product itself and the velocity in adding new products. You know, how do we measure or ensure trust, which is such a core element of the Remitly experience? How do you ensure trust, whether that's from, you know, a compliance, AML, KYC perspective or from a new product functionality perspective? How are you thinking about measuring that as you-
Yeah.
...implement these new things?
Well, there's two buckets here. One is all the AI you do internally. So in your own walls, you know, whether you're using LLM or the coding assistants or agents to do different tasks inside the company, that's all. That's within your walls and quite managed. I think there's a big open question about how much AI do you take to customers, and I think all the industry is trying to figure that out. I mean, I don't know if your bank is giving you a way to just talk to AI and get all your balances and all that. That's a whole new frontier.
Mm-hmm.
From a customer trust perspective, I think that we are very carefully analyzing where we do put in intelligence in front of the customer that's not a human, 'cause that's basically what you're doing is, can you take intelligence, put it in front of your customer, and it's not a human.
Mm-hmm.
Internally, you can take a lot more risks, and we are. We're doing a lot of, you know, we're a very lean forward company in AI, and I think that, you know, if you were to rank us, I mean, we're in the top 10% of public companies that are growing 30%. We're growing more than 80% or 90% of public companies. Internally, we're leaning in very hard to quote-unquote "AI" in the internal pieces of the company, task by task, you know, function by function, marketing, development and testing. We go through it all. Externally, stay tuned. I think we're learning.
We're, you know, like everybody, I think our call center uses a bit of AI to do some co-piloting with calls, but we have not really put AI in front of our customer yet because it hasn't passed our trust.
Sure.
Our trust checkbox. That's. We're gonna be very careful about that.
Understood. Maybe moving back to the cost, we've talked a lot already about the leverage that you've seen in the business. Some of the best, whether it's transaction margins or, you know, lowest customer support marketing spend since you've went public in terms of percentage of revenues. Maybe let's take the flip side of that. What are the areas that you are most looking to, you know, lean in and continue to invest in?
First of all, you know, the principle that we have is we want to drive a very balanced growth-
Mm-hmm.
...profitability and investment that ultimately drives long-term free cash flow per share, you know, compounding. As we think about that equation, we see both the flywheel in the existing business we talked about, which will continue to just get better and better, and that will drive leverage. The second is we see near-term opportunities. Think about the high-value senders.
Mm-hmm.
That will be something that we'll be able to take a lot of our existing strengths and be able to apply there. I'd say I feel really good about, you know, the investment plus leverage pieces there. Of course, we'll come with investment, and then we'll drive leverage. It'll be more near term. It won't take the investment, it won't take time for the return on investment. That's the good news there, which is what we have seen with, you know, marketing being able to leverage even as we move to high-value centers, a great example of that.
Mm-hmm.
The third one is businesses and receivers. Now, that's where we'll be making investments, and then we'll be seeing long-term, you know, long-term returns. This equation is something that we are managing in a very balanced way. That's, you know, managing the short term with that medium-term and long-term, we remain very confident. Again, the ultimate thing I would highlight again to you is the flywheel. These are all very adjacent and connected markets.
Mm-hmm.
They are not like we're not moving into something very different. We'll see the flywheel effects continue to accrue.
Right.
to our business, you know, in the short term, medium-term, and long term.
Okay, great. A bit ago you mentioned the secular shift. You know, I was gonna ask where you think the industry is, and maybe I assume it's very different for the different customer cohorts now, but maybe for that core, you know, migrant/ immigrant sender, where are we in that shift from cash to digital?
Yeah. Again, you rightly pointed, Daniel, that it's different across different markets, and you can take two spectrums and you can look at, for example, the U.S. to Mexico corridor versus U.S. to India. It will be very different. U.S. to India is like, you know, there's a leap in terms of using digital technologies, wallets, etcetera, and we see that. Whereas on the other end, in some of the Latin America corridors, we see a lot of cash.
Mm-hmm.
You know, there's a lot of headroom in terms of even the shift from a structural perspective. It's across the board, but overall, if you take a combined view, there is a lot of headroom even in the core sender from that structural shift, both from a revenue growth as well as from an expense management. We talked about, you know, every single quarter we have seen the digital mix benefit of a transaction expense leverage, for example.
Got it. Okay, great.
It also varies, you know, even if you look at Latin America, there is an impact of the receiving country. I mean, there are some countries. Brazil is. I don't know if any of you have been to Brazil lately. It's probably the most digital-savvy country on the planet right now. Which is very different to the Mexico corridor, where still there's a, you know, very large cash economy. One of our differentiators is we're very tuned into every corridor. You know, some countries are gonna be more friendly to receiving stablecoins, and some countries are gonna be more friendly to digital. One of our differentiators and one of our offerings is Remitly. We are 5,000 corridors. We treat each one differently, have differentiation in each one.
It's very related to the pair, which is the person that's sending and the person that's receiving.
Mm-hmm.
The behaviors are very different across the world. You know, as an example, you can't send stablecoins to India, but you can send them to Argentina. Brazil is a very digital country at this point. You know, and all across the region, you have different combinations.
Are you seeing a large uptick, you know, recently? Do you see the growth, you know, curve accelerating for stablecoins, especially on the receive side in Latin America or whether it's different parts of, you know, Africa or any other high inflation market potentially?
Yeah, we're seeing some growth. You know, we have many tools to make the experience better for the sender and the receiver. There are countries that have more volatile currencies where the receiver is requesting stablecoins, and we're, you know, providing that service. I think it's. You're gonna see growth there.
Mm-hmm.
Other places, I think fiat works fine, and our cost structures are equal or better than they are for stablecoins. Other corridors, stablecoins will have a huge benefit. It'll grow, and I think it'll be driven by, you know, does the customer want the stablecoin?
Mm-hmm.
Is it easy for the sender to use, especially from the send countries to, you know, U.S., U.K., Canada? Is it easy to send stablecoins?
Got it. Okay, great. Maybe let's move on to some of the new products, and specifically maybe for Vikas, if we could talk about, you know, how you've gained confidence in pricing these new products. A lot of times, especially for the core remittance customer, you know, if they have that willingness and maybe even ability to, you know, pay a subscription fee, that could be over $100 a year or, you know, an extra fee on a Flex transaction. Talk about that ability and willingness to pay.
Yeah. I first start by saying that, you know, when we think about offerings, even from a cross-border payment perspective, we think about, you know, a customer-first approach that will ultimately drive business model and flywheel effects to accrue to our bottom line, right? It's a win-win for both the customer as well as for us. That is, as I said, true from a cross-border payment perspective, but even as we look at our newer products, newer offerings, or even newer set customer categories, if you may. If you know, think about send now, pay later, and we talked a lot about that at the Investor Day also. We look at, you know, what is the, call it, you know, customer constraints that they have.
If we are able to meet that customer, you know, constraint in a low-friction way, what is the appetite for the customers to pay for that offering? Then we say that, okay, with that, is it a, you know, business that gives us a bottom-line outcome that is worth it? Can it have a huge market opportunity where, you know, going into that market gives us not only just the right unit economics, but scale, along with unit economics?
Mm-hmm.
Send now, pay later is one of those we again. You know, just going back to the Investor Day view we shared, if you even look at the, call it, you know, net take rates or take rates, gross take rates of that, they are multiple times of what our, you know, existing business would be. You know, it's very important that even some of the aspects like cost of capital, et cetera, were baked into that. So it's a very full cost loaded view that we shared. So overall, I would say going back to just our principles, we think about a win-win-
Yeah
for the customer as well as for us. We think about scale and how that will ultimately accrue to the unit economics and the size of the market in every move that we make.
Some of these, especially for the send now, pay later Flex product, I mean, you have data, and you are specifically targeting and inviting a certain cohort subset of your customers. So, you know, you're
That's right.
Going after the right people.
This is not available for everyone.
Right.
This is only for a select invite-only group. To your point, we can always put filters to say, we will only invite customers who have at least had three transactions with us or at least have a two-year history with us. It's a lot of combination we can drive. You know, as I said, you know, we are very deliberate about the unit economics that we get out of it.
Maybe just one more on the new products. For the business use case, I realize we're looking at, you know, small in terms of SMB-
Mm-hmm
...you know, often freelancers, micro merchants. Is there any functions that you can see, you know, product offerings that you still need to build out, to better serve the business client in particular?
We're very excited.
Wow
About this one. There's two components to it. One is the small business that needs to pay people around the world, and then the second one is the contractors around the world who want to be paid by a small business. That's kind of the request.
Mm-hmm.
We have a lot of ideas on both ends. If you're a small business in the U.S., and you have to pay three people, you know, this functionality to pay three people at the same time in one click versus paying three. If you're requesting, you know, you need some kind of validation, you need to probably invoice. As you start to pull the thread on those two pieces, that connection, there are a lot of functionality that we have and that we're building. If you were to see our list of product deliveries over the next 90 days, we have a lot of things that we're delivering.
This is very early days for us, so even without having some of the functionality, we're getting a lot of traction. We're very excited that as we start to deliver these very specific pieces from the send side of a small business-
Mm-hmm
...on the receive side of a, you know, somebody providing services to those businesses, I think we're excited about what the upside on that business is. It's a very large market, super messy. Lots of, you know, lots of complications for businesses to pay other people and vice versa. We think we can bring the Remitly experience to that market, and it's gonna be terrific.
Great.
Just one addition to that is, like, if you think about business, all the network scale and other assets we have accrue to that right off the bat.
Mm-hmm.
There's no huge step change in terms of our investment.
Right.
Creates a great advantage for us.
Perfect. If we could talk about new geographies and geographic growth. You know, one of the major send countries that you've been adding recently, a lot of that has been in the Middle East and the Gulf region, now an area impacted by, you know, some more geopolitical tensions and unrest. If you could talk about, you know, maybe any near-term or recent impacts that you've been seeing out of that region.
Yeah. Still, it's a very small region. We're just getting started there. It is one of the largest corridors in the world.
Mm-hmm
Especially from Saudi out into Pakistan, Bangladesh, and India. We are. It's a small piece of the business for us. We're not seeing any impact yet. I'm sure that there could be some impact if this continues, but we are, as part of our strategy, we're gonna continue to invest, continue to build it out. There are a lot of pieces of our business just very naturally fits into those corridors.
Sure.
You know, the specific answer to your question, no impact to us, fortunately. On the other hand, we've got a small business there.
Okay
You know, with a lot of growth opportunities.
Great. Before I ask my final question, any questions from the audience?
I'll ask just-
Sure.
Just a quick one is something we get from investors, try to understand what's driving and continues to drive your differentiation and market share gains on the core. I know we're excited about the new products and the build-out, but you've consistently shown more wallet share, I'm sorry, download share actually, right-
Mm-hmm
... and more customer adds than almost any other remittance company. How sustainable is that now that you see Western Union, you see other companies out there really developing more digital offerings also?
Yeah. I'll give a quick one, and then Sebastian, feel free to jump in. Look, I think it goes back to just, the core product ethos. We are a very digital, tech-first, customer-first, company.
Mm-hmm
Looking at the customer experience, creating, you know, essentially a frictionless experience for the customer. We look at, you know, views like number of defect rates, customer calls, et cetera, to just make sure that the experience customer gets is a flawless experience. Along with that, we want to make sure that they are getting that experience with a fair price, with a lot of trust. If you look at our app ratings, they are at 4.9 on that, you know, Apple App Store. So clearly a lot of focus on that customer trust angle, which helps us to continue to win.
Yeah. I think, you know, customers care about price, speed, and trust. In fintech, you know, the product is the business. They don't talk to us. They just talk to our product.
Right.
I think that, the reason we continue to win is because we have a great product. The day we don't have a great product, we're not gonna win.
Right.
It's really, that's how we focus the company. I think we have a very good roadmap, and that's, I think, why you're seeing these results so far.
Great. I think that's a great place to wrap. Sebastian, good talking to you.
Thank you very much.
Thank you, Daniel.