Remitly Global, Inc.
Q1 2023 Earnings Call Transcript

Published: 7 May 2023

[Operator:]

Good day and thank you for standing by. Welcome to the Remitly First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen Shulstein, Vice President, Investor Relations. Please go ahead.

[Stephen Shulstein:]

Thank you. Good afternoon, and thank you for joining us for Remitly's first quarter 2023 earnings call. Joining me on the call today are Matt Oppenheimer, Co-Founder and Chief Executive Officer of Remitly; and Hemanth Munipalli, our Chief Financial Officer. Our results and additional management commentary are available in our earnings release and presentation slides, which can be found at ir.remitly.com. Please note that this call will be simultaneously webcast on the investor relations website. Before we start, I would like to remind you that we'll be making forward-looking statements within the meaning of the Federal Securities Laws, including but not limited to statements regarding Remitly's future financial results and management's expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You should not place any undue reliance on any forward-looking statements. Please refer to our earnings release and SEC filings for more information regarding the risk factors that may affect our results. Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and Remitly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following presentation contains non-GAAP financial measures. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings release and the appendix to our earnings presentation, which are available on the IR website. Now, I will turn the call over to Matt to begin.

[Matt Oppenheimer:]

Thank you, Stephen, and thank you all for joining us to discuss our strong first quarter results and increased outlook for 2023. The first quarter of this year continued the trends we saw in 2022 with strong top-line growth and increasing returns from our investments. Our digital-first-at-scale approach and loyal and resilient customer base has allowed us to deliver consistent and differentiated performance. Our strategy of making customer-centric investments to drive scale and reinvent the remittance experience continues to deliver strong growth and high returns. I'll start by focusing on Remitly's vision

[Hemanth Munipalli:]

Thank you, Matt. I'm very pleased with the strong financial performance we delivered in the first quarter. I'll begin by reviewing some high-level drivers of our financial performance and will then discuss the priorities we're focusing on to ensure we can deliver sustainable growth and high returns for many years to come. And I'll finish with our updated outlook for 2023 and how we're building a differentiated financial profile to drive long-term returns. With that, let's turn to our first quarter results. As a reminder, I will discuss non-GAAP operating expenses and adjusted EBITDA in my remarks. These metrics exclude items such as stock-based compensation, the donation of common stock in connection with our pledge 1% commitment, transaction and integration costs related to acquisitions, and foreign exchange gain or loss. Reconciliations to GAAP results are included in the earnings release. Beginning on Slide 13 with our high-level financial performance in the first quarter. We were pleased to deliver high active customer and revenue growth and adjusted EBITDA profitability. Quarterly active customers grew by 50% year-over-year to 4.6 million. Send volume grew 40% year-over-year to approximately $8.5 billion, all resulting in revenue growth of 50% year-over-year to $204 million. Our GAAP net loss was $28 million in the quarter and included $29 million of stock compensation expense recognized in the quarter. The strong growth in revenue, combined with significantly lower transaction expense as a percentage of revenue and marketing efficiency, led to adjusted EBITDA of $5.4 million in the quarter. Now let's turn to some of the key factors that drove our strong performance in the first quarter. On Slide 14, we detailed the drivers of our strong performance. Let's begin with revenue, which was up 50% year-over-year in the first quarter on a reported basis and 53% on a constant-currency basis. Our strong revenue growth was driven by the scale effects that Matt discussed, including the high retention of existing customers and benefits from earlier send market expansion. As is typical, activity from returning customers contributed to a significant portion of total revenue in the first quarter, which reflects the non-discretionary nature of remittances and the loyalty of our customers. In the first quarter, we also acquired a record number of new customers who we expect will contribute to revenue growth in future periods. We also continue to see customers increased their preference for digital receive options and we're pleased to be able to serve them with our broad and high-quality network with digital disbursement options, including 4 billion bank accounts and 1.2 billion mobile wallets. Turning to our transaction expenses, which includes costs related to our pay-in partners, disbursement partners, and fraud losses. Transaction expense as a percentage of revenue improved 500 basis points year-over-year and is another example of how we're benefiting from scale and investments in technology. This was primarily due to lower fraud loss rates in the first quarter and was driven by improved algorithms, which harness our increasing amount of data and analytical sophistication to more precisely delineate between good and potentially fraudulent transactions. This enabled us to deliver a better experience to the vast majority of our customers with legitimate transactions by limiting friction related to manual reviews. This is a clear benefit to our customers who experience a more seamless transaction and to our cost structure. We will continue to invest in our data and analytics capabilities to manage both our fraud loss rates and provide our customers with frictionless experiences. However, as we've noted before, we expect some variability in fraud loss rates in any quarter, while continuing to make sustainable improvements in the long-term. We also benefited from improving terms with payment and disbursement partners as our volumes have increased. As more volume flows through our network, we're able to negotiate better terms, while also adding more direct integrations with disbursement partners, the benefits of which Matt discussed earlier. Consistent with the fourth quarter, a key driver of our strong results in the first quarter was the efficiencies we sustained in our new customer acquisition marketing as we continued our focus on delivering high returns on our marketing spend. We were able to take advantage of our increasing scale and brand awareness and acquired a record number of new customers in the quarter. As customer acquisition cost, or CAC, makes up the vast majority of marketing expense, we were able to deliver an 890-basis point year-over-year decline in overall marketing expense as a percentage of revenue. CAC declined 31% year-over-year and was relatively flat sequentially as we were able to sustain our marketing efficiencies. Consistent with the fourth quarter, improvements in CAC outside of North America were a significant driver of the reduction in CAC. Overall, a number of factors show declines in CAC, including increased benefits from localized digital marketing, increased greater velocity, improving brand awareness, word-of-mouth effects, and increasing scale in our business, including outside of North America. In Q1, we experienced a relatively weaker advertising market, compared with the first quarter of 2022. We expect to remain dynamic in managing CAC within our investment thresholds to ensure that we continue to aggressively grow our customer base given the strong payback we see from our marketing investments. We will continue to monitor the advertising and marketing trends during 2023 with the expectation that the competitive advertising market conditions would start to normalize. While we expect to sustain our CAC efficiencies and continue to optimize our marketing spend, we expect to moderate year-over-year improvements in future quarters. We are also focused on delivering long-term scale efficiencies, while at the same time investing in our growth opportunities. In the first quarter, G&A expense increased 120 basis points year-over-year as we saw higher expenses related to our acquisition of Rewire, partially offset by continued discipline on headcount and non-headcount expenses. We are maintaining discipline and evaluating opportunities across our operating expenses and expect to moderate overall growth rates in headcount this year, while continuing to make high-return yielding investments for the long-term. Technology and development expenses increased 170 basis points year-over-year and reflects the investments we're making in our remittance platform, developing complementary new products and enabling increasing automation across various operational areas such as customer service and back-end transactional processing. We expect to continue to invest in delivering a superior experience for our customers and are confident in the long-term returns this will deliver. Customer support and operations expense were down 50 basis points year-over-year as a percentage of revenue. We expect to see improved efficiencies in customer support over time as we continue to scale and reap the benefits from product enhancements and automation. Our focus for 2023 and beyond remains four key areas to drive sustainable long-term returns as you can see on Slide 15. These are to continue to deliver strong revenue growth, improve transaction expense, sustain or improve marketing efficiency, and increase scale efficiencies in other operating expenses. By focusing on executing across these four areas, particularly with the additional focus on efficiencies, we believe we can deliver sustainable, long-term high returns. First, we expect to consistently deliver high double-digit revenue growth even as we scale. The investments we're making in our product, marketing, and our global network will help us drive robust growth in active customers and sustain high retention. In the first quarter, these factors helped deliver 50% year-over-year revenue growth. Second, we're making progress on improving our transaction expense cost structure as we increase our volume of remittance transactions. We believe there are additional opportunities over the medium to long-term to reduce costs related to both pay-in and disbursement partners as we scale. On the pay-in side, we had now processed more than [$30 billion] [ph] of volume on an annual run rate basis, enabling additional efficiencies with payment partners. On the disbursement side, our increasing number of transactions allows us to not only negotiate better terms with disbursement partners, but also allows for additional direct integration opportunities that are not available to subscale competitors. Finally, as the volume of data increases in our proprietary fraud models, we're able to drive down transaction loss rates without adding significant friction to the customer experience. As we've indicated in the past, we expect some variability in transaction expense from quarter-to-quarter as some fraud costs remain inherently unpredictable, but we strongly believe that our progress is sustainable over the long-term. Turning to marketing efficiency. Marketing efficiency has been a large driver of our increasing returns on our investments. As we scale, we believe our brand awareness and word of mouth will continue to increase, making our marketing expenses more efficient over time. We have benefited from a relatively weak competitive advertising market and we expect a year-over-year comparison going forward to normalize. However, we believe the vast majority of the recent CAC efficiencies we have delivered are sustainable and are another result of the scale benefits that Matt discussed. We plan to continue investing in high-return marketing with a focus on maintaining strong unit economics. Turning to other operating expenses, which include technology and development, customer support, and G&A. Our technology and development expense reflects the investments we're making in remittance product enhancements, including risk and compliance. It also includes investments in complementary new products and increasing automation in various operational areas. These investments are critical in driving long-term customer loyalty, as well as additional opportunities for increased customer engagement. In addition, our remittance product investments ensure a frictionless customer experience and our improved precision in fraud management will also drive leverage in customer support costs over time as our customers will contact us less often. Our G&A costs reflect the investments we have been making to ensure we have the right infrastructure to support our growth initiatives. As we scale, we expect to see long-term leverage on costs as we remain disciplined on headcount and non-headcount expenses. Delivering all these priorities has allowed us to increase our outlook for both revenue and adjusted EBITDA in 2023 as you can see on Slide 16. Specifically, we expect revenue to be between $875 million and $895 million, which reflects a year-over-year growth rate of 34% to 37% and is a $15 million increase in the midpoint from our prior outlook. The increase in our revenue outlook is primarily driven by the strong trends we have seen in the first quarter and our expectations for continued strength in new customer acquisition and the resilience of our existing customers. While we expect to remain in a GAAP net loss position, we expect adjusted EBITDA to be between $5 million and $15 million, which is a $5 million increase at the midpoint from our prior outlook. The increase in our adjusted EBITDA outlook is primarily driven by strong performance in the first quarter. The outlook also allows us to take advantage of opportunities to acquire even more customers if the unit economics remain compelling. We are planning for a macro and FX environment that remains relatively stable to what we have seen in the first quarter of 2023. Our continued global diversification and increasing scale helps us to mitigate localized macroeconomic trends. We expect to sustain CAC efficiencies we have delivered over the past year in a normalizing competitive advertising market. Finally, we expect to continue prioritizing investments in our technology and development organization and ensuring that these investments are aligned to our strategic priorities. Our balance sheet, with over $240 million of cash, as seen on Slide 17, positions us strongly to deliver on our strategic priorities. Our cash balance at quarter-end reflects approximately $60 million of cash used to fund the acquisition of Rewire, which closed in January, including the repayment of assumed debt. Our primary focus for capital allocation remains our organic growth priorities of new customer acquisition, geographic expansion, remittance product enhancements, and complementary new products. I'd like to finish by discussing the differentiated financial profile we're building to deliver long-term sustainable returns. The building blocks of this profile include predictable active customer behavior and therefore revenue profile, robust unit economics, the discipline in managing operating expenses, including share-based compensation expense, and delivering high returns on our investments. This differentiated and disciplined financial model would enable us to sustain growth in adjusted EBITDA over the long-term and deliver a strong operating income and cash flow profile in the coming years. We believe we're in a unique position to execute on this model across various economic environments and look forward to delivering for our customers and shareholders for many years to come. With that, Matt and I will open up the call for your questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Andrew Schmidt with Citi. Your line is now open.

[Andrew Schmidt:]

Hey, Matt. Hey, Hemanth. Good quarter here. Thanks for taking my questions. I wanted to start off on just take rate. Understand it's an output, not an input, but strong performance there. Maybe you could just dissect that a little bit and talk about whether that was like-for-like corridors or mix. Just curious what's driving that? That looks like another area of strength in the quarter. Any color to that would be helpful. Thanks a lot, guys.

[Hemanth Munipalli:]

Yeah. Hey, thanks, Andrew. Great question. First of all, I just want to reinforce great quarter. I think we're pretty pleased with the results for this quarter. Obviously, top line came in pretty strongly for us with the new customer acquisition. We did see active customer growth has been phenomenal for us in Q1. And in terms of take rates specifically, as you mentioned, we look at it mostly as an outcome of mix, both corridor mix, and we've now expanded our corridors quite a bit, as well as the mix of our various disbursement options we provide to our customers. And so, what we're really seeing is the output of what that does to us in terms of take rate. And it's been, to a point, ticked up the last couple of quarters, but it's still operating well within the range that we've seen historically between 2% to 2.5%. So, we continue to look at it, but we're really focused on making sure we're providing real value to our customers, and we're happy with how that's going.

[Andrew Schmidt:]

Got it. Thank you very much for that, Hemanth. And, Matt, maybe a higher-level question for you. Appreciate the comments on the business in terms of just the resilience and the predictability. And this is often, this is an area where I get a lot of questions. But you talked a little bit about this in prepared remarks. Maybe you could just mention a little bit about beyond just the resiliency of the customer, what makes the model the way you run the business more predictable than maybe some others? And then as the business gets bigger, does that also help predictability? It sounds like you're seeing clearly some benefits of scale fraud models, but just we'd love to hear your thoughts on those topics. Thanks a lot, guys.

[Matt Oppenheimer:]

Yeah, absolutely. Thanks, Andrew. It's great to hear from you. Yeah, I think that what you see with the overall industry is that there's a shift to digital first players and specifically digital first players that have scale because of the areas that I outlined in my remarks. Scale gives us a ton of advantages in terms of being able to drive down error rates, improve the customer experience, drive down costs, create a more differentiated product. And I think that the exciting thing about where we're at is that we're seeing that flywheel continue to spin. So, the more customers that are using our product, the more we can reinvest in things like our disbursement network, like our risk systems. And so, that is really what's driving a lot of our overall, I think, outperformance. And then the foundation is that our customers, as I mentioned and as you alluded to, have the grit, the resilience, the tenacity to continue to support their families back home. And I do think that that is a trend that has been seen specifically with remittances to low and middle-income countries. And that's what motivates our team every day is to serve customers like our customers to be able to enable them to send money back home in a very trusted, seamless, and affordable way.

[Andrew Schmidt:]

Got it. Thank you for that, Matt. Congrats on a great quarter, guys.

[Matt Oppenheimer:]

Thank you. Next question.

[Operator:]

Thank you. Our next question comes from the line of Ramsey El-Assal with Barclays. Your line is now open.

[Unidentified Analyst:]

Hi, guys, this is Allison on for Ramsey. Thanks so much for taking our question and congrats on the quarter. So, you spoke a little bit to the lower-than-expected marketing expense and how that was driven by this less competitive advertising market. Can you just speak to the competitive dynamics in the advertising market that you're seeing today? What do you think is driving less competition there and how that could trend throughout the year?

[Hemanth Munipalli:]

Yeah, it's a good question, Allison. And I think we've seen this now for a couple of quarters actually until last year. I think when we look at the broader financial services sector, the spending from that sector has actually been less. And so, we look at some of the costs of advertising, they have generally been more favorable even in the back half of last year. We saw a bit of that in Q4 of last year as well, and we've continued to see that in Q1. As we look forward, we're expecting a degree of normalization when it comes to the competitive advertising market. And so, we're watchful of that. We're really focused on making sure that we continue to focus on the things that we control from a marketing efficiency perspective. We're really pleased with the effects we're seeing in terms of CAC improvements we were sustaining. But I also just want to point out is look forward not only on the competitive aspects that we continue to monitor and we expect a degree of normalization as we get to the back half of the year, we've made a fairly significant CAC improvement to last year. So, we'll start – starting to comp over into those. But we're still within our guardrails and we're excited about continuing to have high return on the marketing investments.

[Matt Oppenheimer:]

And, Allison, the only thing that I'd add there is, you know, I think that there's a lot of benefits that are both because of our execution and just our position overall in the market. And specifically, what I mean by that when it comes to the marketing front and improvement in customer acquisition costs is the word-of-mouth effect that I mentioned. We had 4.6 million quarterly active users. It would be much larger on an annual active basis. We have millions of users using our platform really having a great experience and that word-of-mouth effect certainly helps us. It's another benefit of scale and that flywheel that I mentioned. And then the other is just our marketing approach, which I think is differentiated. I think we tend to be more analytical data-driven, unit economic-focused marketers. And I think that that's paid dividends because we can both via our marketing teams' execution and the marketing platform we've built that enables us to match the customer acquisition with – the customer acquisition cost with the lifetime value on a bit more of a the-average and scientific basis. And so, I think all of those things are perhaps why you're seeing outperformance in addition to the tailwinds that we're seeing from a competitive advertising environment. And we feel really well-positioned to be able to continue to grow and continue to acquire customers at a really favorable return.

[Unidentified Analyst:]

Thank you, guys, so much. That was super helpful.

[Matt Oppenheimer:]

Thanks, Allison.

[Matt Oppenheimer:]

Thanks Allison.

[Operator:]

Our next question comes from the line of Darrin Peller with Wolfe Research. Your line is open.

[Darrin Peller:]

Hey, guys, thanks. I think just seeing the balance between the growth and the profitability you're showing has been great. Maybe we can just give a little bit more into that in terms of the operating leverage now and the business going forward as you grow at these rates. What kind of investment do you think it's going to take or, let's call it on an annual basis, incremental investment would it take to have these kinds of growth rates, which are obviously industry-leading? And then do you anticipate an ongoing pass-through to the margin in a greater way each year? Just remind us, I guess incremental margins of that.

[Hemanth Munipalli:]

Yeah, I think the broad answer here, Darrin, is, I mean we're starting to see really the benefits of being at scale as a digital-first player. And it's starting to reflect clearly both in terms of the data we have, the understanding of our customers and the cohorts we have, and as well as some of the economics we can get from our pay-in and payout partners as well. So, that's really the foundation here that we're starting to see transaction margin continue to improve. We've seen this now in the last couple of quarters where transaction margin has gone up and has improved. And a lot of that is again driven by fraud. We've talked about fraud algorithms getting better based on the data we have and just getting much more precise in terms of how we understand what's a potentially fraudulent transaction versus a legitimate transaction. While we're not giving out specific margin guidance at a detailed level, what you're seeing is a margin improvement. And we're continuing to focus on efficiencies across the business, whether it's G&A, whether it's also making sure as we look at product and technology investments, we're allocating that capital in the right places and delivering high returns. So, net-net, we expect to continue to improve in the mid, long-term our overall margin profile, whether it's at the variable level or at the EBITDA level. But for this year, this is our first year of getting to a profitability, and we're really pleased to have raised our guidance on EBITDA by 5 million [indiscernible].

[Darrin Peller:]

That was great to see. Thanks. Matt, just a very quick follow-up. I mean from a competitive landscape standpoint, obviously, we're all getting the question over what a large competitor is doing on price and frankly also Visa Plus and some dynamics around just different incremental tech that could be offered for alternatives to provide cross-border. So, maybe just a quick latest thoughts on competition I the industry overall. Thanks again, guys.

[Matt Oppenheimer:]

Yeah, absolutely, Darrin. Yeah, appreciate that question. I think, first, the overall industry if you look at it, is still very fragmented. So, the largest player I believe has 15%-plus market share. And so, I think that given some of the trends around digital, given some of the trends that are delivering our results, I would expect to continue to see consolidation given some of the scale advantages that I mentioned. And so that's a continuation of the trend that we've seen over the last several years and quarters. And we're really excited to be in a well-positioned place, not only from a scale standpoint but from a digital-first approach standpoint, which I think gives us a differentiated product. So, that’s point number one. And I think that the second point in terms of short-term pricing changes, overall anything that's changed on the short-term horizon, the answer there is no. I think that we continue to have a service that you see in the results today. Customers really value not only because of the fair price that we charge, but because of the peace of mind and trust that we offer to customers, that only continues to get better with the scale that I mentioned, improving a variety of aspects of our products and systems. That ultimately put yourself in the shoes of our customers. They value that peace of mind and their ability to go to a trusted product more than anything else.

[Darrin Peller:]

Yeah, certainly doesn't look like it's impacting you guys. Thanks, again.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from the line of Cris Kennedy with William Blair. Your line is open.

[Cris Kennedy:]

Good afternoon and thanks for taking the question. You guys have expanded into several new countries and markets over the last 18 months, a couple of years. Can you just talk about how some of those newer corridors are going and are we really seeing it in the numbers yet?

[Matt Oppenheimer:]

Yeah, thanks, Cris. The way that I think about geographic expansion is when I go back approximately five years and we started expanding to various markets in Europe, we were planning the seeds for the kind of growth that we're now seeing in those markets. And it doesn't necessarily take five years. But I just go back because you can see how fast some of our international business and rest of world business is growing, which is quite remarkable. So, that is because of the seeds that we planted in those countries that we launched a year or two, three, five years ago. And that's the way I think about the markets that we just launched. UAE, we've mentioned in the past, very excited about that market given the size and scale and opportunity. We just launched it, and we're rolling out the playbook that we rolled out across a variety of other countries, whether that's EU, Australia, you name it. And so, I would expect that to contribute meaningfully this year. But if you think about the quarters and years to come, UAE, and other markets that we're launching now will continue the kind of sustained predictable, fast growth rate that we delivered today last quarter.

[Cris Kennedy:]

Great. And then just following the shutdown of passbook, can you give us an update on some of the additional services that you're focused on adding to the platform? Thank you.

[Matt Oppenheimer:]

Yeah, thanks, Cris. Yeah. We believe that we have a significant long-term opportunity in both offering our network and infrastructure to other businesses and in developing complementary new products for our remittance customers. So, while I didn't share a lot of additional details on that today, you can expect additional details in the future and we're really excited about what's to come there.

[Cris Kennedy:]

Understood. Thank you.

[Operator:]

Thank you. Our next question comes from the line of Will Nance with Goldman Sachs. Your line is now open.

[Will Nance:]

Hey, guys, nice job. Another great quarter. Appreciate you taking the questions. I wanted to follow up on some of the commentary that you had around the improving efficiency on transaction margins. And I was wondering if you could, kind of maybe double click on that and give us a sense for how much more optimization in your existing networks there are to continue to reduce costs in transaction costs? For instance, is there some stat you can give us for X of the top 10 corridors? We've seen 20% reduction in transaction costs, and we'll get the same thing on the rest of the corridor. Just anything you can, kind of tell us to give us a sense for where we are in that journey of optimizing the cost of some of the existing volume you've got on the platform?

[Hemanth Munipalli:]

Yeah, thanks, Will, for the question. I think, unfortunately, I don't think I'll be giving you a lot of stats specifically on it, but I can give you a bit more color. And I think what we've seen in the last couple of quarters and maybe a little bit to the back half of last year and Q4, we saw transaction margin improved. A lot of that was attributed to our fraud loss expenses coming down as we deploy some of the newer models there and we're able to differentiate between, sort of the potentially fraudulent transactions and legitimate ones like we talked about this quarter as well. I think that particular effect of just improving our models consistently and as we scale get more and more data on our customers, I think we will continue to see some benefits there. Again, given the potential for some volatility in that in any given quarter, but fraud is on that trajectory. On the pay-in and pay-out side, I think we are, to a degree, in the earlier stages of getting the right margins and economics there. We've gotten enough scale now and we're actively looking at how we can improve our network economics. We've touched on that, the way, an example of Philippines where we now have 17 direct integrations. And when you take something like that and apply that across some of the other newer quarters, as well as we continue to expand internationally, we do see in the mid, long-term that we will see continued benefits from a transaction margin perspective. So, those are some of the big drivers that we see for the mid and long term from a margin improvement perspective.

[Will Nance:]

Got it. Super helpful. Sounds exciting. I guess as a follow-up question, you guys talked about, you see this market consolidating over time. There's been a lot of focus on this in prior calls on the scale benefits that you guys have. How do you think about using that scale as potentially being a consolidator in this market? So, for instance, I'm sure there are pretty solid synergies that you could realize from taking a subscale provider and putting them over your network. Is that something that you think is in the cards over time?

[Matt Oppenheimer:]

Yeah, thanks, Will, I can take that one. Yeah, historically, we found that organic growth and internal build to achieve that scale that I mentioned as the best opportunities. But we continuously review all opportunities as they become available. We have a high bar for any M&A transactions, and we'll remain disciplined on deploying capital. What we are focused on is transforming this industry and really achieving those benefits of scale, which as we often say internally at Remitly, it really feels like we're just getting started in that effort.

[Will Nance:]

I appreciate you taking the questions.

[Operator:]

Thank you. Our next question comes from the line of Matthew O'Neill with FT Partners. Your line is now open.

[Matthew O'Neill:]

Yeah, hi, thank you so much for taking my question. I wanted to just dig in a little bit more on some of the new send market openings. You guys mentioned I think the latest big market you opened was the UAE with the office in Dubai. I was just wondering in particular in the Middle East, it's a fairly unique market globally for remittances to the informal channels. Just wondering, have there been any unique challenges or learnings after entering the market? I know it's early days, but are you looking at it with a more excited outlook to entering further Middle East markets and/or any other challenges to call out in that region thus far?

[Matt Oppenheimer:]

Yeah, thanks for the question. I can take that one. I think that the – we're very excited about the UAE. As I mentioned earlier, it's the second-largest outbound remittance market in the world. And so, a big opportunity. And you're right that each send market does have a different customer profile, different payment acceptance, different compliance requirements, different KYC, know your customer, and identity verification processes. And I think what we've proven now across 170, that's combination of send and receive markets, but 170 countries that we now serve is that we're good at going in doing that optimization and then scaling that business. And so, I'd say that that applies to the UAE. There are definitely unique elements of that market. There are definitely unique complexities. I think that it's good that we now have a portfolio of other countries that we've expanded to, to draw from in terms of that experience and pattern matching from other countries that we're in. And so, excited about what's to come there and excited that we've got this playbook that we've rolled out now across a lot of different countries that we've proven that works well.

[Matthew O'Neill:]

Thanks so much, Matt. I did have one quick follow-up for Hemanth, if there's a time, which is simplistically, on the top line, the guidance increased, the midpoint I believe was about 15 million, and the beat versus consensus was a little bit more than half that in the quarter. Anything in particular as we think about the rest of the year where the outperformance comes from or just kind of broad-based, nothing, in particular to call-out?

[Hemanth Munipalli:]

Yeah. Thanks for the question, Matt. There's nothing particular. I think we are continuing to execute strongly and it's really been a trend around that. We're really pleased with the growth of our active customers, as well as record new customer acquisitions and we've been seeing that now for a multitude of quarters. So, we expect to continue in that trajectory into the rest of the year.

[Matthew O'Neill:]

Understood, I'll hop back in. Thanks so much.

[Hemanth Munipalli:]

Thank you.

[Matt Oppenheimer:]

Thanks.

[Operator:]

Thank you. That's the final question. I'd now like to turn the call back to Matt Oppenheimer for closing remarks.

[Matt Oppenheimer:]

Sounds great. Thank you so much. Awesome. Well, yeah, thank you everybody for your thoughtful questions. And as we often do at Remitly, I'd like to end the call by highlighting another one of our amazing customers whose name is Olf. Olf joined Remitly last year and sends money from Sweden to family in the Philippines. And Olf commented, ‘a quick and easy way to send money. I'm always using it.’ We thank, Olf, for his loyalty and consistent use of Remitly to send money home to his loved ones. And thank you, everybody, for joining us, and we appreciate your support. We are excited about the opportunities ahead and look forward to sharing our progress as we continue to execute on our vision of transforming the lives of immigrants and their families by providing the most trusted financial services on the planet.

[Operator:]

This concludes today’s conference call. Thank you for participating. You may now disconnect.