Q3 2023 Remitly Global Inc Earnings Call

Speaker 1: Good day and thank you for standing by. Welcome to Remitly's Q323 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would not like to hand the conference over to your speaker today, Stefan Scholstein.

Good day and thank you for standing by welcome to remit leaves Q3 twenty-three earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session. Please press star one one on.

And your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please be advised that today's conference is being recorded I would not like to hand, the conference over to your speaker today, Steph and show screen.

Vice President of Investor Relations.

Speaker 2: Good afternoon and thank you for joining us for Remitly's third quarter 2023 earnings call. Joining me on the call today are Matt Oppenheimer, co-founder and chief executive officer of Remitly, and Hemath Munapalli, 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.

Good afternoon, and thank you for joining us permanently at third quarter, 20th twenty-three earnings call.

Joining me on the call today, our map Oppenheimer co founder and Chief Executive Officer of permanently and came up to me to Polly our Chief Financial Officer.

A result in additional management commentary are available in our earnings release presentation slides, which can be found at <unk> dot com.

Note that this call will be simultaneously webcast on the Investor Relations website.

Speaker 2: Before we start, I'd like to remind you we'll be making forward-looking statements in the meeting of federal securities laws, including but not limited to statements regarding remittance 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 undue reliance on any forward-looking statements.

Where we start I'd like to remind you will be making forward looking statements and in the meeting a federal securities laws, including but not limited to statements regarding room at least feature for natural result of management's expectations of appointments.

Which I need a promises nor guarantees involve risks and uncertainties may may cause actual results are very materially from those presented here you should not place undue reliant.

With my statements.

Speaker 2: Please refer earnings release and SEC filings for more information regarding the risk factors that may affect their results. Any forward-looking statements made on this comments call, including responses to your questions, are based on current expectations as of today, and remittedly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law.

Her name's releasing a SEC filings for more information regarding the risk factors that may affect our results any forward looking statements made on this conference call, including responses to your questions are based on current expectations as of today governmentally, assuming no obligations update a revised them, whether there was all the new developments or otherwise except as required by law.

Speaker 2: The following presentation also contains non-GAAP financial measures for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric. Please see your earnings press release and the appendix to our earnings presentation, which are available on the IR section of our website. Now I will turn the call over to Matt to begin.

Presentation also contains non-GAAP financial measures for reconciliation of these non-GAAP financial measures the mustard directly comparable got matrix police their earnings press release in the appendix to earn his presentation, which are available on the on our section of our website now I will turn the call over to Matt to begin.

Speaker 3: Thank you, Stefan, and thank you all for joining us for our third quarter earnings call. We are very pleased with the strong results we have delivered this year for our customers and shareholders.

Thank you Stephanie and thank you all for joining us for our third quarter earnings call. We are very pleased with the strong results. We have delivered this year for our customers and shareholders.

Speaker 3: As you can see on slide four, our strategic focus remains the same with a portfolio of high return investments to capture an even larger share of a very large market.

As you can see on slide for our strategic focus remains the same with a portfolio of high return investments to capture an even larger share of a very large market.

Speaker 3: We have been able to consistently deliver increasing operating leverage while simultaneously investing in our four key growth priorities of new customer acquisition, geographic expansion, frictionless remittances, and complementary new products.

Been able to consistently deliver increasing operating leverage while simultaneously investing in our four key growth priorities.

A new customer acquisition.

Graphic expansion frictionless, remittances and complimentary new products.

Speaker 3: These investments have allowed us to deliver increasing scale, geographic revenue diversification, a more reliable and frictionless product, and continued automation and cost savings. In addition, these four priority sets have differentiated return timing, which will allow us to deliver profitable long-term growth as we build the most trusted financial services brand for immigrants and their families.

These investments have allowed us to deliver increasing scale geographic revenue diversification in more reliable and frictionless product.

And continued automation and cost savings and additionally, four priority have differentiated returned timing, which will allow us to deliver profitable longterm growth as we build the most trusted financial services brand for immigrants and their families.

Speaker 3: Well, while we have doubled our market share over the past two years, we are still only slightly more than 2% of the more than $1.6 trillion global remittance market.

Alright, well, we have doubled our market share over the past two years, we are still only slightly more than 2% of the more than 1.6 trillion dollar global remittance market.

Speaker 3: A prior investment has resulted in increasing market share in the US and Canada. And yet we are by no means near our market share potential. And we expect to continue to drive significant growth for many years to come in the US and Canada.

Our private investments have resulted in increasing market share in the U S and Canada and yet we are by no means near our market share a potential and we expect to continue to drive significant growth for many years to come in the U S and Canada.

Speaker 3: We grew revenue over 30% in the U.S. and over 40% in Canada during the third quarter and acquired a record number of new customers in each of these markets, which bodes well for future growth.

We grew revenue over 30% in the U S and over 40% in Canada during the third quarter and acquired a record number of new customers in each of these markets, which bodes well for future growth.

Speaker 3: Outside the U.S. and Canada, we have an even larger opportunity to drive market share as well as revenue growth of over 90% in the third quarter and an increasing share of new customers coming from outside the U.S. and Canada. We have significant growth opportunities both in markets that we are currently in and those we expect to enter over the coming years.

Outside the U S. In Canada, we haven't even larger opportunity to drive market share as well as revenue growth of over 90% in the third quarter and an increasing share of new customers coming from outside the U S and Canada we.

We have a significant growth opportunities both in markets that we are currently in and those we expect to enter over the coming years.

Speaker 3: With that backdrop, let's turn to a brief overview of our third quarter results.

With that backdrop, let's turn to a brief overview of our third quarter results.

Speaker 3: Our third quarter results were strong, as you can see on slide five. Our track record of execution through various economic cycles and delivering on promises continued in the third quarter. Our business continues to have momentum with 43 percent year on year revenue growth and fourth straight quarter of adjusted EBITDA profitability. We've continued to earn the trust of our customers through an experience that delivers peace of mind, which leads to improved customer activity and strong unit economy.

Our third quarter results were strong as you can see on slide five our track record of execution through various economic cycle and delivering on promises continued in the third quarter. Our business continues to have momentum with 43% year on year revenue growth.

And fourth straight quarter of adjusted EBITDA profitability. We've continued to earn the trust of our customers through an experience that delivers peace of mind, which leads to improved customer activity and strong yield economics.

Speaker 3: As a result of our execution and the returns we are seeing from our portfolio of investments, we are pleased to be raising our 2023 annual outlook for revenue once again. We are also raising our 2023 adjusted EBITDA outlook to reflect the strong performance in the third quarter and our expectation of continued strong performance and previously discussed targeted marketing investments in the fourth quarter.

As a result of our execution and the returns we are seeing from our portfolio of investments. We are pleased to be raising our 2023 annual outlook for revenue. Once again, we are also raising our 2023 adjusted EBITDA outlet to reflect the strong performance in the third quarter and our expectation of continued strong performance and previously discussed target and Mark.

Getting investments in the fourth quarter and.

Speaker 3: In the third quarter, our quarterly active customers grew 42% year-over-year, as you can see on slide 6. This strong customer growth is driven by the peace of mind we build into our product through every step of the journey, from the moment our customers open the Remitly app until the funds are safely delivered to their loved ones. We now serve 5.4 million quarterly active customers.

In the third quarter or quarterly active customers grew 42% year over year as you can see on slide six this strong customer growth is driven by the peace of mind rebuild into our product through every step of the journey from the moment our customers open the <unk> app until the fund our safely delivered to their loved ones. We know survive for me.

<unk> quarterly active customers.

Speaker 3: Our new customer acquisition this quarter was once again a record high and resulted in us adding 1.6 million quarterly active users in the third quarter compared with the third quarter of last year. We continue to benefit from scale, a multi-year focus on brand building, increasing creative velocity, and word of mouth.

Our new customer acquisition. This quarter was once again, a record high and resulted in us, adding $1.6 million quarterly active users in the third quarter compared with the third quarter of last year we.

We continue to benefit from scale, a multiyear focus on brand building, increasing creative velocity and word of mouth.

Speaker 3: Customer behavior remains consistently strong, even with the volatile macroeconomic environment, and we are pleased with the customer engagement and retention we are seeing across our corridors and customer cohort.

Customer behaviour remained consistently strong even with the volatile macroeconomic environment and we are pleased with the customer engagement and retention, we're seeing across our corridors and customer cohorts.

Speaker 3: We also believe word-of-mouth has been a key driver of efficient new customer acquisition, as our recent survey results indicate high levels of trust in the Remitley brand and likelihood to recommend Remitley to family and friends.

We also believe word of mouth has been a key driver of efficient new customer acquisition as a recent survey results indicate high levels of trust and the mentally brand and likelihood to recommend <unk> to family and friends.

Speaker 3: Our recent surveys indicate that more than 8 in 10 of our customers have told someone else to use Remitly, and 9 in 10 customers say Remitly is a company they can trust. In addition, 9 out of 10 customers say Remitly is very reliable and easy to use.

Surveys indicate that more than eight in 10 of our customers have told someone else to use were mentally and nine and 10 customers say <unk> is a company. They can trust. In addition, nine out of 10 customers say remotely is very reliable and easy to use.

Speaker 3: This trust in the Remittly brand results from the actions we have taken thus far to deliver a frictionless remittance experience as we expand the number of customers using our product.

This trust and the mentally brand results from the actions we have taken thus far to deliver a friction less remittance experience as we expand the number of customers using our product.

Speaker 3: I'm going to focus the balance of my remarks today on a more in-depth overview of the progress we have made in our new customer acquisition activities and delivering frictionless remittances and why we believe there is so much more opportunity to deliver for our customers.

I'm going to focus the balance of my remarks today on a more in depth overview of the progress we have made in our new customer acquisition activities and delivering frictionless remittances and why we believe there is so much more opportunity to deliver for our customers.

Speaker 3: Turning to slide seven, and more details on our new customer acquisition strategy. As we mentioned last quarter, we plan to make incremental targeted brand marketing investments in the back half of 2023. And we began making those investments in the third quarter. In the fourth quarter, as we continue to have high confidence opportunities to make incremental targeted investments at the top of the funnel, and we plan to execute on these investments as we have discussed.

Turning to slide seven and more details on our new customer acquisition strategy as we mentioned last quarter, we plan to make incremental targeted brand marketing investments in the back half of 2023, and we began making those investments in the third quarter.

In the fourth quarter, and we continue to have high confidence opportunities to make incremental targeted investments at the top of the final and we plan to execute on these investments as we have discussed.

Speaker 3: These investments build on the success we have seen from upper funnel investments that we began making last year.

These investments build on the success, we have seen from upper funnel investments that we began making last year.

Speaker 3: We are investing in upper funnel and integrated brand campaigns because we believe standing behind our promise of trust with investments in broader awareness is key to attracting and retaining even more customers for the long term.

We are investing in upper funnel and integrated brand campaigns, because we believe standing behind our promise of trust with investments in broader awareness is key to attracting and retaining even more customers for the long term.

Speaker 3: An example of these types of investments are our integrated campaigns which combine traditional media and digital channels.

An example of these types of investments are integrated campaigns, which combine traditional media and digital channel.

Speaker 3: In the third quarter, we were live in more than 10 integrated campaigns in target markets across North America, Europe and Australia, and are seeing encouraging early results.

In the third quarter, we were alive in more than 10 integrated campaigns and target markets across North America, Europe, and Australia and are seeing encouraging early results.

Speaker 3: Looking ahead, the fourth quarter is a key quarter to acquire new customers, give an increased sending volume over the holidays. Therefore, we expect to take advantage of that opportunity. And as a result, we expect CAC to increase sequentially in the fourth quarter, but to remain within our high return LTV to CAC guardrail.

Looking ahead, the fourth quarter is a key quarter to acquire new customers given increased sending volume over the holidays. Therefore, we expect to take advantage of that opportunity and as a result, we expect captain increased sequentially in the fourth quarter, but remain within our high return LTV attack Guard rails.

Speaker 3: We expect these investments will drive high confidence, revenue and active customer growth in 2024.

We expect these investments will drive high confidence revenue and active customer growth in 2024.

Speaker 3: The other area where I'll give a more detailed update is on investments we are making to deliver frictionless remittances as you can see on slide 8.

The other area, where I'll give more detailed update on investments, we are making to deliver frictionless remittances as you can see on Friday.

Speaker 3: As I've mentioned in the past, trust is paramount for our customer base, both because our customers are trusting us with their personal information and funds, but also because delivering remittances international in a reliable and trusted way is incredibly hard and complex.

As I mentioned in the past trust is Paramount for our customer base, both because our customers are trusting us with their personal information and funds, but also because delivering remittances international in a reliable and trusted way is incredibly hard and complex.

Speaker 3: Examples of this complexity include localization across over 170 countries. Reducing friction for customers across different payment methods and currencies. Fraud and compliance systems that prevent bad actors while at the same time maintaining a great overall customer experience. Sophisticated treasury effects cash management and delivering funds reliably and speele to billions of bank accounts mobile wallets and cash pick up locations across the globe.

Examples of this complexity include localization across over 170 countries, reducing friction for customers across different payment methods and currencies fraud and compliant systems that prevent bad actors while at the same time, maintaining a great overall customer experience sophisticated treasury FX cash management.

And delivering funds.

Funds reliably and speedily to billions of bank accounts mobile wallet and cash pickup locations across the globe.

Speaker 3: All of this requires scale and a digital first approach and importantly a critical focus on reducing friction across all stages of the remittance journey. Something that we are uniquely positioned to deliver and we're just getting started in our effort to do so.

All of this requires scale and the digital first approach and importantly, a critical focus on reducing friction across all stages of the remaining journey something that we are uniquely positioned to deliver and we're just getting started in our effort to do so.

Speaker 3: I will provide more details on two key customer engagement points during the remittance journey, which can introduce friction in their experience and the investments we continue to make from a product perspective to significantly reduce these types of frictions.

I will provide more details on two key customer engagement point during the remittance journey, which can introduce friction in their experience.

And the investment we continued to make from a product perspective to significantly reduce these types of friction.

Speaker 3: The first happens when customers fund their transactions and the second is during the disbursement of the funds to receive.

The first happened when customers fund their transactions and the second is during the disbursement of the funds to recipients.

Speaker 3: Remittly collects funds from customers in 33 countries or territories, 13 payment types such as ACH, debit card, SOFORT, or IDEAL, and in 106 currencies.

<unk> fund from customers in 33 countries or territories 13 payment types, such as a debit card so for our ideal and in 106 currencies.

Speaker 3: We call our fund Collection from Customers Payment Acceptance.

We call our fund collection from customers payment acceptance.

Speaker 3: And friction can result from a customer not having their preferred payment method available, delays, payment failures such as declined cards, inability to make edits to payment or other technical issues, or a clear and rapid process in case a refund is requested.

And friction can result from a customer not having their preferred payment method available delays payment failures, such as declined cards inability to make edits the payment or other technical issues or a clear and rapid process in case, a refund is requested.

Speaker 3: Therefore, quality and reliability of the payment acceptance process takes continuous monitoring, optimization, and expertise in order to provide a fast and frictionless experience.

For a quality and reliability of the payment acceptance process takes continuous monitoring optimization and expertise in order to provide a fast and frictionless experience.

Speaker 3: We are proud of the uniquely frictionless experience we provide as evidenced by the nine out of 10 customers in our recent customer survey saying, remotely, it's very reliable and easy to use. But we also know that we are just getting started in payment acceptance and we can continue to reinvent the way this is done for our customers with our digital first approach at scale.

We are proud of the uniquely frictionless experience, we provide as evidenced by the nine out of 10 customers in our recent customer survey, saying remotely is very reliable and easy to use but we also know that we are just getting started in payment acceptance and we can continue to reinvent the way. This is done for our customers we.

Our digital first approach at scales.

Speaker 3: Our focus on enhancing our payment acceptance and reducing customer friction includes examples such as providing the ability for our customers to pay with the payment method of their choice.

Our focus on enhancing our payment acceptance and releasing customer friction includes examples such as providing the ability for our customers to pay with the payment method of their choice.

Speaker 3: While we offer card payments in all of our markets, we have also added localized payments such as bank contact in Belgium, so forth in Germany, and wallets such as Apple Pay and Google Pay in the UK, US, and Canada. We have also reduced friction in other parts of the payment acceptance experience by simplifying and providing instant refunds and providing real-time account validation when incorrect payment information is provided.

While we offer card payments and all of our markets. We have also added localized payments such as bank contact in Belgium, So fort in Germany, and wallet, such as Apple pay and Google pay in the UK U S and Canada. We have also reduced friction in other parts of the payment acceptance experienced by simply buying and providing <unk>.

Refund and providing real time account validation when incorrect payment information is provided.

Speaker 3: We also offer customers the option to re-try a failed payment without restarting the entire process, enhancing the overall customer experience and boosting our conversion mess.

We also offer customers the option to retry a failed payment without restarting the entire process enhancing the overall customer experience and boosting our conversion metrics.

Speaker 3: In addition, we continue to expand our global money movement network by adding even more trusted real-time payment partners.

In addition, we continue to expand our global money movement network by adding even more trusted real time payment partners.

Speaker 3: Doing so provides customers with even more payment and disbursement options, reduces customer friction, and reduces transaction costs.

Doing so provides customers with even more payment and disbursement options reduces customer friction and reduces transaction costs.

Speaker 3: As an example, we recently announced a new partnership with MasterCard to integrate MasterCard Send and Cross-Border Servers.

As an example, we recently announced a new partnership with Mastercard to integrate Mastercard sand and cross border services. Today, we're pleased to share that we have renewed our long standing agreement with visa to bring global money movement capabilities to more recently customers and select jurisdictions enabled by decent direct.

Speaker 3: Today, we're pleased to share that we've renewed our longstanding agreement with Visa to bring global money movement capabilities to more remotely customers and selector restrictions enabled by VisaDirect.

Speaker 3: These agreements enhance the value we provide to our customers, and we are grateful for the collaboration with our payment acceptance partners.

These agreements enhanced the value we provide to our customers and we are grateful for the collaboration with our payment acceptance partners.

Speaker 3: Another driver of our ability to reduce customer friction has been improving the quality of our disbursement network, which we define as the way customers receive fund and currently includes 4 billion bank accounts, 460,000 cash pick up locations, 1.2 billion mobile wallets and even door to door delivery and select markets where it is pocket.

Another driver of our ability to reduce customer friction has been improving the quality of our disbursement network, which we define as the way customers received funds and currently includes 4 billion Bank accounts 460000 cash pickup locations, one 2 billion mobile wallet and even door to door delivery and so.

Elect markets, where it is popular.

Speaker 3: The breadth of this network is important, but the depth, which we define as direct integration, which eliminates intermediate hops, thus reducing errors and improving visibility of customer funds as they move through a transaction, is equally important to customers. This enhances our ability to deliver instant transactions for our customers, which is a key driver of loyalty and word of mouth.

Breath of this network is important but the death, which we define it direct integrations, which eliminates intermediate hops, thus, reducing errors and improving visibility of customer funds as they move through a transaction is equally important to customers.

Enhances our ability to deliver instant transactions for our customers, which is a key driver of loyalty and word of mouth.

Speaker 3: The high quality network that we have built across more than 4,900 corridors is difficult to replicate as it requires significant scale in many corridors as well as the right technology investments which we have made over many years.

The high quality network that we have built across more than 4900 corridors is difficult to replicate as it requires significant scale and many corridors as well as the right technology investments, which we have made over many years.

Speaker 3: We keep expanding our direct integrations, and we have increased the number of received countries that have a direct integration partner by approximately 100% from two years ago. As we have been able to expand our network to key partners that matter and are relevant to our customers.

We keep expanding our direct integrations and we have increased the number of receive countries that have that.

That have a direct integration partner by approximately 100% from two years ago as we have been able to expand our network to key partners that matter in a relevant to our customers.

Speaker 3: As our payment and disbursement networks continue to improve, you can see the results in our strong and improving speed metrics.

As our payment and the spokesman networks continue to improve you can see the results and are strong and improving speed metrics and.

Speaker 3: In the third quarter, more than 92% of transactions were dispersed in less than one hour, improving nearly 200 basis points from the third quarter of last.

In the third quarter more than 92% of transactions were dispersed in less than one hour improving nearly 200 basis points from the third quarter of last year.

Speaker 3: While we are proud of our progress, this still means that 8% of transactions take more than an hour. And we are focused on getting as close to 100% of transactions delivered in less than an hour as possible, an extremely important outcome for our customers.

While we are proud of our progress this still means the 8% of transactions take more than an hour and we are focused on getting as close to 100% of transactions deliberated less than an hour as possible and extremely important outcome for our customers. In addition are overall platform availability with 99.

Speaker 3: In addition, our overall platform availability was 99.98% in the third quarter, reflecting the technology investments we have made.

98% in the third quarter, reflecting the technology investments we have made.

Speaker 3: Our 24-7 global customer support service is an important investment we make to protect our customers' peace of mind and resolve friction they may encounter.

Or 24, seven global customer support service is an important investment we make to protect our customers peace of mind and resolved friction they may encounter.

Speaker 3: We are capturing significant opportunities in technology solutions to address some of the key pain points for our customers, whether through self-serve options that help customers find the information they need rapidly, or the ability to amend the transaction seamlessly, while at the same time providing real-time information on the status of the transaction.

We are capturing significant opportunities in technology solutions to address some of the key pinpoint for our customers whether through self serve option that help customers find the information they need rapidly or the ability to amend the transaction seamlessly while at the same time, providing real time information on the status of the transaction.

Speaker 3: We have also been increasing the ability of human agents to handle more complex issues by upskilling agents and investing in technology, including artificial intelligence.

We have also been increasing the ability of human agents to handle more complex issues by upscaling agents and investing in technology, including artificial intelligence.

Speaker 3: These investments in delivering frictionless remittances have resulted in consistent improvements in our customer contact rates over time.

These investments in delivering frictionless remittances have resulted inconsistent improvements in our customer contact rates over time.

Speaker 3: You can also see the early results of these investments on the P&L, where customer support, as a percentage of revenue, has gone down from 10.6% to 8.3%, a 230 basis point year-over-year improvement in the third quarter.

You can also see the early results of these investments on the piano, we're customer support as a percentage of revenue has gone down from 10.6% to 8.3% a 200 and.

30 basis point year over year improvement in the third quarter.

Speaker 3: Well, we are proud of the progress in reducing customer friction. It is clear that a significant opportunity remains to materially improve the customer experience, which will drive even more loyalty and lower costs.

While we are proud of the progress.

And reducing customer friction it is clear that a significant opportunity remains to materially improve the customer experience, which will drive even more loyalty and lower costs. It is important to keep in mind that our customer support costs, which we view as directly directly attributable to friction which drives customer contacts are still <unk>.

Speaker 3: It's important to keep in mind that our customer support costs, which we view as directly directly attributable to friction, which drives customer contacts are still over 8% of our revenue.

8% of our revenue.

Speaker 3: This reflects an investment opportunity to most importantly decrease friction and create a reliable, trusted, and differentiated remittance product, which we can do with operational excellence, scale, and a digital first approach.

Let's reflect an investment opportunity and most importantly decrease friction and create a reliable trusted and differentiated remittance product, which we can do with operational excellence scale and a digital first approach.

Speaker 3: As the customer experience continues to improve, we believe we'll be able to capture additional flywheel benefits in active customer growth by building a trusted brand. Evidence of the significant trust in our platform today are the approximately 1.2 million ratings for the Remitly app in the App Store, with an average of 4.9 stars.

The customer experience continues to improve we believe we will be able to capture additional flywheel benefits and active customer growth by building a trusted brand evidence of the significant trust in our platform today are the approximately 1.2 million ratings for the mentally app and the App store with an average of $4.

Nine stars.

Speaker 3: or over 690,000 ratings in the Google Play Store with an average of 4.8 stars.

Or over 690000 ratings in the Google play store with an average of $4 eight start.

Speaker 3: We look forward to building additional customer trust with our investments to reduce friction at all stages of the transaction.

We look forward to building additional customer trust with our investments to reduce friction at all stages of the transaction.

Speaker 3: As we look ahead, we are anchored on our vision on slide nine to transform the lives of immigrants and their families by providing the most trusted financial services on the planet. We are well on our way to delivering on this vision as we bring reliable and trusted service to millions of customers today.

As we look ahead, we are anchored on our vision on slide nine to transform the lives of immigrants and their families by providing the most trusted financial services on the planet, we are well on our way to delivering on this vision as we bring reliable and trusted service to millions of customers.

Speaker 3: Looking back on our performance so far this year, I am extremely pleased that we have delivered on our promises with consistent revenue outperformance and increasing returns on our investment.

Today looking.

Looking back on our performance so far this year I am extremely pleased that we have delivered on our promises with consistent revenue outperformance and increasing returns on our investments are.

Speaker 3: Our strong results have demonstrated that we have been proven stewards of capital across the economic side.

Strong results have demonstrated that we have been prudent stewards of capital across economic cycles.

Speaker 3: We look forward to continuing to build on the trusted relationships with our customers by sharing the Remitly brand story, expanding to new markets, continuously improving the remittance experience, and driving complementary new products over time to deepen our relationships with customers.

We look forward to continuing to build on the trusted relationships with our customers by sharing the remit leibrand story expanding to new markets continuously improving the remittance experience and driving complimentary new products over time to deepen our relationships with customers executing on this long term <unk> will provide outsized returns for our <unk>.

Speaker 3: Executing on this long-term vision will provide outside returns for our shareholders and deliver exceptional value to our customers.

Shareholders and deliver exceptional value to our customers with that I'll turn the call to him up to provide more details on our financial results and our revised 2023 financial outlook. Thank.

Speaker 3: With that, I'll turn the call to him up to provide more details on our financial results and I'll provide 2023 financial help.

Operator: Good day and thank you for standing by.

Operator: Welcome to Remitly's Q323 earnings conference call. At this time, all participants are in a listen only mode.

Speaker 4: Thank you, Matt. And please, with our strong results in the third quarter, and our consistent execution of the CRS, we focus on delivering strong revenue growth and improving profitability while the same time taking advantage of opportunities to acquire even more customers at robust unit economics.

Thank you, Matt I'm pleased with our strong results in the third quarter and are consistent execution. This year as we focus on delivering strong revenue growth and improving profitability. While the same time, taking advantage of opportunities to acquire even more customers that robust unit economics, and we'll start with a review of our third quarter financial highlights and then provide additional details on our upped.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.

Speaker 4: I will start with a review of our third quarter financial highlights, and then provide additional details on our updated 2023 outlook. I will discuss non-GAAP operating expenses, and I just to keep it done, my remarks.

Operator: Please be advised that today's conference is being recorded.

Stephen Shulstein: I would now like to hand the conference over to your speaker today, Stefan Shulstein, vice president of Invest Relations. Good afternoon and thank you for joining us for Remitly's Q323 earnings call. Joining me on the call today are Matt Oppenheimer, co-founder and chief executive officer of Remitly and Hemanth Munipalli, 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.

<unk> 2023 outlook.

We'll discuss non-GAAP operating expenses and adjusted EBITDA in my remarks. These metrics exclude items suggest stock based compensation for donation of the common stock in connection with our pledge, 1% commitment acquisition integration and restructuring costs and foreign exchange gain or loss reconciliations to GAAP results are included in the earnings release.

Speaker 4: These metrics exclude items such as stock-based compensation, the donation of the common stock in connection with our pledged 1% commitment, acquisition, integration, and restructuring costs, and foreign exchange gain or loss. Reconciliations to gap results are included in the earnings release.

Speaker 4: With that, let's turn to our third quarter results, beginning on slide 11, with our high level financial performance.

With that let's done to our third quarter results beginning on slide 11, with a high level of financial performance.

Speaker 4: We delivered another quarter of greater than 40% active customer and revenue growth and increased year-over-year adjusted EBITDA profitability. Quarterly active customers grew by 42% year-over-year to 5.4 million. Send volume grew 36% year-over-year to approximately $10.2 billion, all resulting in revenue growth of 43% year-over-year to $242 million.

Stephen Shulstein: Please note that this call will be simultaneously webcast on the investor relations website. Before we start, I'd like to remind you, we'll be making forward-looking statements in the meeting of 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 involved risk and uncertainties to make us actual results are very materially from those presented here. You should not place undue reliance in any forward-looking statements.

We delivered another quarter of greater than 40% of active customer revenue growth and increase year over year adjusted EBITDA profitability quarterly active customers grew by 42% year over year to $5.4 million <unk> volume grew 36% a year over year approximately $10.2 billion, all resulting in revenue growth of 42 per.

Second year over year to do $42 million.

Speaker 4: Our gap net loss was $36 million in the quarter and included $37 million of stock compensation expense, $4.6 million related to our donation of common stock for our pledge 1% commitment, and $2.9 million of acquisition, integration, and restructuring costs.

Our gap net loss was $36 million in the quarter and included $37 million of stock compensation expense 4.6 million related to our donation of comments top for our flags, 1% commitment and $2.9 million acquisition integration and restructuring costs.

Stephen Shulstein: Please refer our earnings release and SEC filings for more information regarding the risk factors that may affect our results. Any forward-looking statements made on this comments call, including responses to your questions are based on current expectations as of today. Now, Remitly assumes the obligations update or revise them, whether as a result of new developments or otherwise, except as required by law. Following presentation also contains non-gap financial measures for reconciliation of these non-gap financial measures that most are directly comparable gap metrics.

Speaker 4: Acquisition integration restructuring costs include 1.5 million related to the integration of rewire and 1.4 million of restructuring, which includes costs related to simplifying and scaling certain processes and teams, such as customer support to more efficiently serve our customers.

Acquisition of integration and restructuring costs include 1.5 million related to the integration and rewire and $1.4 million, a restructuring which includes costs related to simplifying and scaling certain processes and teams such as customer support more efficiently serve our customers the strong growth in revenue combined with significantly lower.

Stephen Shulstein: Please say your earnings press release and the appendix to our earnings presentation, which are available on the IR section of our website.

Speaker 4: The strong growth in revenue combined with significantly lower transaction expense as a percentage of revenue led to adjusted EBITDA of 10.5 million in the quarter.

Transaction expenses as a percentage of revenue led to adjusted EBITDA of standpoint $5 million in the quarter as described on our last earnings call as our unit economics remain highly attractive we plan to make additional marketing investments in the back half of 2023 to acquire even more customers as we look forward to continued momentum and.

Matthew Oppenheimer: Now, I will turn the call over to Matt to begin. Thank you, Stefan, and thank you all for joining us for our third quarter earnings call. We are very pleased with the strong results we have delivered this year for our customers and shareholders. As you can see on slide four, our strategic focus remains the same, with the portfolio of high return investments to capture an even larger share of a very large market.

Speaker 4: As we described on our last earnings call, as our unit economics remain highly attractive, we plan to make additional marketing investments in the back half of 2023 to acquire even more customers as we look forward to continued momentum in 2024 and beyond.

2024 and beyond a.

Speaker 4: We partially solve the interior impact of these investments in our third quarter adjusted EB double performance and fully expect to see the benefits from these investments in 2024.

A partially solved the impact of these investments and our third quarter adjusted EBITDA performance and fully expect to see the benefits from these investments in 2024.

Matthew Oppenheimer: We have been able to consistently deliver increasing operating leverage while simultaneously investing in our four key growth priorities of the new customer acquisition, geographic expansion, frictionless remittances, and complementary new products. These investments have allowed us to deliver increasing scale, geographic revenue diversification, a more reliable and frictionless product, and continued automation and cost savings. In addition, these four priorities have differentiated return timing, which will allow us to deliver profitable long-term growth as we build the most trusted financial services brand for immigrants and their families.

Speaker 4: Now let's turn to slide 12 for a detailed review of performance in the third quarter. Let's begin with revenue, which was up 43% Eurovia in the third quarter on a reported basis, and 42% on a constant currency base.

Now, let's started to slide 12 for a detailed review of our performance in the third quarter.

Let's begin with revenue, which was up 43% a year over year in the third quarter on a reported basis and 42% on a constant currency basis.

Speaker 4: A strong revenue growth was primarily driven by the 42% increase in quarterly active customers, which includes a record number of new customers acquired in the quarter and high retention of existing customers.

Strong revenue growth was primarily driven by the 42% increase in corgi active customers, which includes a record number of new customers acquired in the quarter and hide retention of existing customers.

Speaker 4: Consistent with prior quarters, our existing customers contributed to the vast majority of revenue in the quarter. A large number of new customers we acquired in the quarter and highly efficient acquisition costs will primarily help drive growth in 2024 and beyond.

Consistent with prior quarters are existing customers contribute to the vast majority of revenue in the quarter.

A large number of new customers, we acquired in the quarter at highly efficient acquisition costs will primarily help drive growth in 2024 and beyond.

Matthew Oppenheimer: While we have doubled our market share over the past two years, we are still only slightly more than 2% of the more than $1.6 trillion global remittance market. Our prior investments have resulted in increasing market share in the US and Canada, and yet we are by no means near our market share potential, and we expect to continue to drive significant growth for many years to come in the US and Canada.

Speaker 4: underlying customer behavior in the third quarter remained very strong, reflecting the non-disquestionary nature of remitances, and our focus on providing a frictionless lived experience.

Underlying customer behavior in the third quarter remained very strong, reflecting the non discretionary nature residences on our focus on providing a frictionless noted experience.

Speaker 4: Our revenue in the quarter was impacted by a variety of mixed shifts in line with normal movement in the business.

Revenue in the quarter was impacted by a variety of mix shifts in line with normal movement in the business as we mentioned last quarter. We continue to see a shift the digital disbursement options in certain markets, which results in smaller transactions sizes and increased transaction intensity.

Speaker 4: As we mentioned last quarter, we continue to see a shift to digital disbursement options in certain markets, which results in smaller transaction sizes and increased transaction intensity.

Matthew Oppenheimer: Canada. We grew revenue over 30% in the US and over 40% in Canada during the third quarter and acquired a record number of new customers in each of these markets, which both well for future growth. Outside the US and Canada, we have an even larger opportunity to drive market share as well as revenue growth of over 90% in the third quarter and an increasing share of new customers coming from outside the US and Canada. We have significant growth opportunities both in markets that we are currently in and those we expect to enter over the coming years.

Speaker 4: We also continue to see revenue diversification as rest of the world revenue grew over 90% in the third quarter of 2023 compared to the third quarter of 2022.

We also have continued to see revenue diversification as the rest of the world revenue grew over 90% in the third quarter of 2023 compared to the third quarter of 2022.

Speaker 4: We expect to continue to see midships quoted a quarter as our business evolves to be even more global, driven by various factors including customer preferences around payment and dispersement options, FX movements and geographic expansion.

We expect to continue to see mixtures quarter to quarter as our business the walls to be even more global driven by various factors, including customer preferences around payment and disbursement options FX movements and geographic expansion.

Speaker 4: We expect to consistently deliver very strong revenue growth even as you scale. These investments were making in our product, marketing and our global network will help us drive robust growth in active customers and sustain high retention.

We expect to consistently deliver a very strong revenue growth even as you scale. These.

Matthew Oppenheimer: With that backdrop, let's turn to a brief overview of our third quarter results. Our third quarter results were strong as you can see on slide five. Our track record of execution through various economic cycles and delivering on promises continued in the third quarter. Our fourth straight quarter of a justity of it up profitability. We continued to earn the trust of our customers through an experience that delivers peace of mind, which leads to improved customer activity and strong unit economics.

These investments, we're making in our product marketing in our global network will help us drive robust growth in active customers and sustained high retention.

Speaker 4: We continue to make product enhancements to reflect customer preferences with a focus to improve customer lifetime value.

We continue to make product enhancements reflect customer preferences with the focus to improve customer lifetime value.

Speaker 4: as our unit costs have been declining, we have the ability to invest in delivering more value for our customers to drive long-term transaction activity and retention while maintaining strong long-term unit economics at the same time.

As our unit costs have been declining we have the ability to invest in delivering more value for our customers to drive longterm transaction activity added attention, while maintaining strong longterm unit economics at the same time.

Speaker 4: Transaction expense as a percentage of revenue improved 580 basis points year-over-year as we continue to benefit from a rapidly increasing scale. Of the 580 basis point improvement in transaction expense, approximately 180 basis points were due to improved economics with payment acceptance and disbursement partners as we demonstrate scale and are increasing value to our partners across our global payment acceptance and disbursement network.

Transaction expense as a percentage of revenue improved 580 basis points year over year as we continue to benefit from a rapidly increasing scale after.

Matthew Oppenheimer: As a result of our execution and the returns we are seeing from our portfolio of investments, we are pleased to be raising our 2023 annual outlook for revenue once again. We are also raising our 2023 adjusted EBITDA outlook to reflect the strong performance in the third quarter and our expectation of continued strong performance and previously discussed target and marketing investments in the fourth quarter. In the third quarter, our quarterly active customers grew 42% year-over-year as you can see on slide six.

After 580 basis point improvement in transaction expense approximately 180 basis points were due to improved economics with payment acceptance and disbursement partners as we demonstrate scale and are increasing value to our partners across our global payment acceptance and disbursement networks.

Speaker 4: As we continue to scale, we expect additional opportunities to improve our economics with our partners across both payment acceptance and displacement net.

As we continue to scale, we expect additional opportunities to employer economics with our partners across the board payment acceptance and displacement networks.

Matthew Oppenheimer: This strong customer growth is driven by the peace of mind we build into our product through every step of the journey. From the moment our customers open the remit li app until the funds are safely delivered to their loved ones. We now serve 5.4 million quarterly active customers. Our new customer acquisition this quarter was once again a record high and resulted in us adding 1.6 million quarterly active users in the third quarter compared to the third quarter of last year.

Speaker 4: As Matt mentioned, we recently signed new agreements with large global payment partners.

As Matt mentioned, we recently sign new agreements with large global payment partners, our ability to enter into these agreements reflect the value of the additional scale, let me bring on both the payment acceptance and disbursements science visa.

Speaker 4: Our ability to enter into these agreements reflects the value of the additional scale that we bring on both the payment acceptance and disbursement side.

Speaker 4: These agreements also provide us with a meaningful opportunity to benefit from scale on our payment acceptance costs as a significant majority of our customers fund their transactions with debit and credit cards.

These agreements also provide us with a meaningful opportunity to benefit from scale on our payment acceptance cost as a significant majority of our customers find their transactions with debit and credit cards.

Matthew Oppenheimer: We continued to benefit from scale. A multi-year focus on brand building, increasing creative velocity and word of mouth. Customer behavior remains consistently strong even with the volatile macroeconomic environment and we are pleased with the customer engagement and retention we are seeing across our corridors and customer cohorts. We also believe word of mouth has been a key driver of efficient new customer acquisition. As our recent survey results indicate high levels of trust in the remit li brand and likelihood to recommend remit li to family and friends.

Speaker 4: These opportunities are ongoing and reflect the additional value and scale we bring to our part.

These opportunities are ongoing and reflect the additional value unscarred, we bring to our partners we've.

Speaker 4: We also benefited from the continued improvement in fraud loss rates in the third quarter, even as we onboarded a record number of new customers.

We also benefited from the continued improvement in a fraud loss rates in the third quarter, even as we onboard a record number of new customers.

Speaker 4: This sustained improvement reflects the investments were made in a fraud technology, which allows us to more precisely block bad transactions by preserving a frictionless experience for a legitimate customer.

Sustained improvement reflects the investments were made enough fraud technology, which allows us to more precisely blocked back transactions, while preserving a fiction less experience for a legitimate customers.

Speaker 4: Managing fraud loss rate is always a balance between customer experience and optimizing fraud levels. We're very pleased this quarter that our fraud loss rate continues to improve while the same time our customer contact rate continues to decline. Thus demonstrating that we're able to deliver less friction for our customer.

Managing fraud loss rates is always a balance between customer experience optimizing fraud levels were very pleased this quarter that our fraud loss rate continues to improve while at the same time, our customer contact Greg continues to decline does demonstrating that we're able to deliver less fixed for our customers. However.

Matthew Oppenheimer: Our recent surveys indicate that more than 8 in 10 of our customers have told someone else to use remit li and 9 in 10 customers say remit li is a company they can trust. In addition 9 out of 10 customers say remit li is very reliable and easy to use. This trust in the remit li brand results from the actions we have taken thus far to deliver a frictionless remit and experience as we expand the number of customers using our product.

Speaker 4: However, as we've noted before, fraud losses are inherently unpredictable, especially as we continue to acquire a significant amount of new customers during the seasonally strong fourth quarter. As a result, we expect some variability in fraud loss rates in any quarter while continuing to make sustainable improvements in the long term.

However, as we have noted before fraud losses are inherently unpredictable, especially as we continued to acquire a significant new customers during the seasonally strong fourth quarter. As a result, we expect some variability in fraud loss rates in any quarter, while continuing to make a sustainable improvements in the long term.

Speaker 4: Third quarter results also reflected our focus on acquiring new customers at StrongUnit Economics. As we mentioned last quarter, we were able to take advantage of these StrongUnit Economics and make some targeted incremental marketing investments in the quarter, including some upper funnel investments.

Matthew Oppenheimer: I'm going to focus the balance of my remarks today on a more in-depth overview of the progress we have made in our new customer acquisition activities and delivering frictionless remitances and why we believe there's so much more opportunity to deliver for our customers. Turning to slide seven and more details on our new customer acquisition strategy. As we mentioned last quarter we plan to make incremental targeted brand marketing investments in the back half of 2023 and we began making those investments in the third quarter.

Third quarter results also reflected our focus on acquiring new customers at strong unit economics, as we mentioned last quarter, we were able to take advantage of the strong unit economics and make some targeted incremental marketing investment in the quarter, including some upper final investments.

Speaker 4: We're confident that we will see strong returns from these investments in 2024 as we look to maintain high rates of growth for many years to come.

We're confident that we will see a strong returns from these investments in 2024, as we look to maintain higher rates of growth for many years to come.

Speaker 4: While marketing expense as a percentage of revenue was essentially flat Euro-Vier due to our investments, we remained focused on optimizing incremental payback and LTV to CAC ratio, which remained strong in the quarter. CAC was relatively flat sequentially and was slightly up Euro-Vier reflecting these additional investments.

While the marketing expense as a percentage of revenue was essentially flat year over year due to our investments we remain focused on optimizing incremental payback and LTV to CAC ratio, which remained strong in the quarter tack was relatively flat sequentially and was slightly up year over year, reflecting these additional investments we continued to benefit.

Matthew Oppenheimer: And the fourth quarter as we continue to have high confidence opportunities to make incremental targeted investments at the top of the funnel and we plan to execute on these investments as we have discussed. These investments build on the success we have seen from upper funnel investments that we began making last year. We are investing in upper funnel and integrated brand campaigns because we believe standing behind our promise of trust with investments in broader awareness is key to attracting and retaining even more customers for the long term.

Speaker 4: We continue to benefit from optimizing localized digital marketing, increased creative velocity, improving brand awareness, word of mouth effects, and increasing scale in our business outside of North America.

From optimizing localized digital marketing increased creative velocity, improving brand awareness, what amount of effects and increasing scale in our business outside of North America.

Speaker 4: In the third quarter, customer support and operations expenses were down 230 basis points year-over-year as a percentage of revenue as we continue to see leverage on this line item. We expect to continue to drive efficiencies from increasing automation and reducing friction, as well as our improvements in fraud precision, which help drive down contact rate.

In the third quarter customer support and operational expenses were down 230 basis points year over year as a percentage of revenue as we continue to see leverage on this line item.

Matthew Oppenheimer: An example of these types of investments are our integrated campaigns which combine traditional media and digital channels. In the third quarter we were live in more than 10 integrated campaigns in target markets across North America, Europe and Australia and are seeing encouraging early results. Looking ahead, the fourth quarter is a key quarter to acquire new customers, give an increased sending volume over the holidays. Therefore, we expect to take advantage of that opportunity.

We expect to continue to drive efficiencies from increasing automation and reducing friction as well as our improvements in fraud precision, which helped drive down contact rates.

Speaker 4: Technology and development expenses increase 160 basis points year over year and reflect long-term return investments. We're making a relevant platform to reduce friction for customers, improve fraud risk and compliance technologies, develop complimentary new products, and increase automation across customer service, and backend transaction process.

Technology and development expenses increased 160 basis points year over year and reflect too long term return investments where.

Making it our relatives platform to reduce friction for our customers improve fraud risk and compliance technologies developed complimentary new products and increased automation across customer service and back and transaction processing.

Matthew Oppenheimer: And as a result, we expect cash increase sequentially in the fourth quarter but to remain within our high return LTV to catch guardrails. We expect these investments will drive high confidence revenue and active customer growth in 2024.

Speaker 4: We can see some of the benefits from these investments in the leverage we're seeing in transaction and customer support expenses. We expect to continue to invest in delivering a superior experience for our customers. We're excited about the returns we're currently seeing, including strong active customer growth and improvement in customer support costs, as well as future returns our investments will deliver as our product continues to get better.

We can see some of the benefits from these investments and the leverage we're seeing in transaction and customer support expenses, we expect it to continue to invest in delivering a superior experience for our customers are excited about the returns. We're currently seeing including strong active customer growth and improvement in customer support costs as well as future returns investments with the.

Matthew Oppenheimer: The other area where I'll give more detailed update is on investments we are making to deliver frictionless remittances as you can see on Friday. As I have mentioned in the past, trust is paramount for a customer base, both because our customers are trusting us with their personal information and funds, but also because delivering remittances international inter-reliable and trusted way is incredibly hard and complex. Examples of this complexity include localization across over 170 countries, reducing friction for customers across different payment methods and currencies, fraud and compliance systems that prevent bad actors, while at the same time maintaining a great overall customer experience, sophisticated treasury effects cash management, and delivering funds reliably and speedily to billions of bank accounts mobile wallets and cash pickup locations across the globe.

<unk> as our product continues to get better.

Speaker 4: In the third quarter, GNXPENC is a percentage of revenues flat year over year. We continue to focus on moderating overall growth rates in both head count and non-head count expenses while targeting higher productivity.

In the third quarter of Ginny expenses, a percentage of revenues flat year over year, we continue to focus on moderating overall growth rates in both had kind of non had gone expenses, while targeting higher productivity.

Speaker 4: Our gap net loss in the quarter was $36 million compared with $33 million in the third quarter of 2022. Our net loss included $37 million of stock compensation expense in the third quarter compared with $26 million in the third quarter of last year.

Our GAAP net loss in the quarter was $36 million compared with $33 million in the third quarter of 2022.

Net loss included $37 million of stock compensation expense in the third quarter compared with 26 million in the third quarter of last year.

Speaker 4: We're actively focused on managing stock-based compensation and have made adjustments to compensation structures in order to maintain appropriate balance between rewarding employees for the value they deliver while managing shared dilution.

We are actively focused on managing stock based compensation and have made adjustments to compensation structures in order to maintain appropriate balance between rewarding employees for the value that deliver when managing shared values.

Speaker 4: Our focus for 2023 and beyond remains four key areas to drive sustainable long-term returns, as you can see on slide 13. These are to continue to deliver strong revenue growth, improve transaction expense, sustain or improve marketing efficiency while delivering new customers at strong unit economics, and increase scale efficiencies in other operating expenses.

Our focus for 2023 and beyond remains four key areas to drive sustainable long term returns as you can see on slide 13.

Matthew Oppenheimer: All of this requires scale and a digital first approach and importantly, a critical focus on reducing friction across all stages of the remittance journey, something that we are uniquely positioned to deliver and we're just getting started in our effort to do so.

These are to continue to deliver a strong revenue growth improve transaction expense sustainer improved marketing efficiency, while delivering new customers at strong unit economics, and increase scale efficiencies and other operating expenses.

Speaker 4: We are proud of our execution this year, as we've delivered both higher than expected revenue growth, making targeted investments for the longer term, while demonstrating operating leverage and sustainably increasing adjusted EBITDA profitability. Within a strong position to be able to make this investment to ensure future growth, while also delivering scale benefits that drop to the bottom line.

Matthew Oppenheimer: I will provide more details on two key customer engagement points during the remittance journey which can introduce friction in their experience and the investments we continue to make from a product perspective to significantly reduce these types of friction. The first happens when customers fund their transactions and the second is during the disbursement of the funds to recipients. Remittly collects funds from customers in 33 countries or territories, 13 payment types such as ACH, debit cards, so forth or ideal, and in 106 current.

We are proud of our execution. This year as we have delivered both higher than expected revenue growth, making targeted investments for the longer term, while demonstrating operating leverage and sustainably increasing adjusted EBITDA profitability.

<unk> in a strong position to be able to make those investments to ensure future growth, while also delivering scale benefits to drop to the bottom line.

Speaker 4: Delivering on these priorities has allowed us to increase our outlook for both revenue and I just did EBITDA in 2020 again as you can see on slide 14. Specifically, we expect revenue to be between 935 million and 940 million dollars, which reflects a year over year growth rate of 43 to 44% and is a 19 million dollar increase in the midpoint from our prior out.

Delivering our list priority that has allowed us to increase our outlook for both revenue and adjusted EBITDA in 2023 again.

Can see on slide 14, specifically, we expect revenue to be between $935 million at $942 million, which reflects a year over year growth rate of 43% to 44% and it's a 19 million dollar increase in the mid point from our prior outlook. The increase in our revenue outlook is primarily driven by the strong trends.

Matthew Oppenheimer: We call our fund collection from customers payment acceptance and friction can result from a customer not having their preferred payment method available, delays, payment failures such as decline cards, inability to make edits to payment or other technical issues, or a clear and rapid process in case a refund is requested. Therefore, quality and reliability of the payment acceptance process takes continuous monitoring, optimization, and expertise in order to provide a fast and frictionless experience.

Speaker 4: The increase in our revenue outlook is primarily driven by the strong trends we have seen in the third quarter. Our expectations for continued trend and customer activity from the record number of new customers we have recently added this year and the resilience for upper existing customers.

We have seen in the third quarter, our expectations for continued strength in customer activity from the record number of new customers. We have recently added this year and the resilience for upper existing customers we.

Speaker 4: We expect adjusted EBITDA to be between $36 million and $41 million, which is a $2 million increase at the midpoint from our prior outcome.

We expect adjusted EBITDA to be between 36 million at $41 million, which is a $2 million increase at the mid point from our prior outlook.

Speaker 4: The increase in our adjusted EBITDA outlook is primarily driven by a strong performance in the third quarter on our expectations of continued strong performance in the fourth quarter offset by the near-term impact of our previously discussed incremental marketing investments.

The increase in our adjusted EBITDA outlook is primarily driven by a strong performance in the third quarter.

Matthew Oppenheimer: We are proud of the uniquely frictionless experience we provide as evidenced by the nine out of ten customers in our recent customer survey, saying Remitly is very reliable and easy to use. But we also know that we are just getting started in payment acceptance and we can continue to reinvent the way this is done for our customers with our digital first approach at scale. Our focus on enhancing our payment acceptance and reducing customer friction includes examples such as providing the ability for our customers to pay with the payment method of their choice.

Expectations of continued strong performance in the fourth quarter offset by the near term impact of previously discussed incremental marketing investments.

Speaker 4: Given the seasonality of Remington Send, the fourth quarter provides the best opportunity to acquire new customers and make additional high-return marketing investments.

Given the seasonality of reminiscence and the fourth quarter provides the best opportunity acquire new customers and make additional high return marketing investments.

Speaker 4: We expect these investments to deliver high long-term returns and also drive strong growth in 2024.

We expect these investments to deliver high long term returns and also drive strong growth in 2024.

Speaker 4: Finally, we expect to continue prioritizing investments in our technology and development organization, and ensuring that these investments are aligned for strategic priorities.

Finally, we expect to continue prioritizing investments in our technology and development organization and ensuring that these investments are lying to us strategic priorities.

Matthew Oppenheimer: While we offer card payments in all of our markets, we have also added localized payments such as bank contact and Belgium, so forth in Germany, and while it's such as Apple Pay and Google Pay in the UK, US, and Canada. We have also reduced friction in other parts of the payment acceptance experience by simplifying and providing instant refund and providing real time account validation when incorrect payment information is provided. We also offer customers the option to retry a failed payment without restarting the entire process, enhancing the overall customer experience and boosting our conversion metrics.

Speaker 4: Our macroeconomic and effects assumptions remain relatively stable to what we've seen in the third quarter of 2023 and we expect continued resilience and customer behavior across our diverse fight portfolio of quarter

Our macroeconomic and effects assumptions remained relatively stable what we've seen in the third quarter of 2023, and we expect continued resilience in customer behaviour across our diversified portfolio of quarters.

Speaker 4: Our balance sheet remains the source of strength to ensure we can fund our high return investments. At the end of the quarter, we had 223 million dollars of cash and access to a $250 million working capital facility.

Our balance sheet remains the source of strength to ensure we can fund our high return investments at the end of the quarter, we had $223 million of cash and access to a 250 million dollar working capital facility.

Speaker 4: Similar to last quarter, a reported cash balance as of September 30th was impacted by timing as the quarter ended on a weekend when we typically have higher pre-funding requirements to ensure funds are available to our customers.

Similar to last quarter are reported cash balance as of September 30th was impacted by timing as the quarter ended on a weekend. When we typically have higher prefunding requirements to ensure the funds that are available to our customers.

Matthew Oppenheimer: In addition, we continue to expand our global money movement network by adding even more trusted real time payment partners. Doing so provides customers with even more payment and disbursement options, reduces customer friction, and reduces transaction costs. As an example, we recently announced a new partnership with mastercard to integrate mastercard send and cross order services. Today, we're pleased to share that we've renewed our long standing agreement with visa to bring global money movement capabilities to more remotely customers and select jurisdiction enabled by visa direct.

Speaker 4: Overall, we have been very pleased by the consistent execution of our business model and strategy, which has been able to deliver consistent, greater than 40% revenue growth, improving adjusted EBITDA margins, and high returns on all our investments.

Overall, we are we have been very pleased by the consistent execution of our business model and strategy, which has been able to deliver consistent greater than 40% revenue growth improving adjusted EBITDA margins and high returns on all our investments.

Speaker 4: We remain focused on allocating capital to the highest return investments to ensure we can deliver the strong financial performance over the long term. With that, Matt and I will open up a call for your questions. Operator.

Remain focused on allocating capital to the highest return investments to ensure we can deliver the strong financial performance over the longterm with that matinee will open up the call to your questions operator.

Speaker 1: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for question.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again one moment for questions.

Matthew Oppenheimer: These agreements enhance the value we provide to our customers and we are grateful for the collaboration with our payment acceptance partners. Another driver of our ability to reduce customer friction has been improving the quality of our disbursement network, which we define as the way customers receive funds and currently includes four billion bank accounts, 460,000 cash pick up locations, 1.2 billion mobile wallets, and even door to door delivery and select markets where it is popular.

Speaker 1: Our first question goes to Amanda Schmidt with City He May Proceed.

Our first question goes from Andrew Schmidt with City you May proceed.

Speaker 5: Hey Matt, here's my mom. Thanks for taking my questions here

Hey, Matt He was a monster thanks for taking my questions here and could see the revenue momentum.

Matthew Oppenheimer: The breadth of this network is important, but the depth which we define as direct integration, which eliminates intermediate hops, thus reducing errors and improving visibility of customer funds as they move through a transaction is equally important to customers. This enhances our ability to deliver instant transactions for our customers, which is a key driver of loyalty and word of mouth. The high quality network that we have built across more than 4900 corridors is difficult to replicate as it requires significant scale in many corridors as well as the right technology investments which we have made over many years.

I want to start off on the the marketing side of things and I think.

It makes sense investing more given the D. L television has stepped up and you can maintain attracts economics, but maybe a couple of questions on that front first maybe you could just talk about <unk> or seeing in performance marketing and then a second if you shift to more copper funnel marketing and things like.

Speaker 5: investing more given that the LTV has stepped up and you can maintain attractive economics. But maybe a couple questions that from first maybe you could just talk about Act trends are seeing in performance marketing. And then second, if you shift to more top of funnel marketing and things like that, you can just talk about your confidence in the efficiency of those initiatives and ability to scale those over time. Those areas will be helpful.

That can you just talk about your confidence in the efficiency of those initiatives and the ability to scale those over time.

Those areas will be helpful. Thanks, a lot guys.

Speaker 3: Thanks, Andrew. Yeah, good to see and appreciate the question. Yeah, on the marketing front, we are excited about the integrated brand campaigns. And I'd say that it's a continuation and an expansion of.

Thanks, Andrea again to see and I appreciate the question.

Yeah on the marketing front, we are excited about the integrated brand campaigns and I'd say that it's a continuation and expansion of.

Speaker 3: A playbook that we've already started to roll out and have proven to be successful and an example of that would be like an integrated marketing campaign that we did in the Miami area where we're seeing the dividends from.

The playbook that we've already starting to roll out and have proven to be successful in an example of that would it be like an integrated marketing campaign that we did in the Miami area, where we're seeing that evidence from.

Matthew Oppenheimer: The high quality network to key partners that matter and are relevant to our customers. As our payment and disbursement networks continue to improve, you can see the results in our strong and improving speed metrics. In the third quarter, more than 92% of transactions were dispersed in less than one hour, improving nearly 200 basis points from the third quarter of last year. While we are proud of our progress, this still means that 8% of transactions take more than an hour, and we are focused on getting as close to 100% of transactions delivered in less than an hour as possible, an extremely important outcome for our customers.

Speaker 3: That's because it drives long-term awareness with strategically important audiences. And what we see is it actually makes our efficient performance marketing even more efficient. And so feel good about our ability to measure those results and feel good about the ability to expand some campaigns that we've already been doing to additional geographies. And the other benefit of that.

That's because it drives longterm awareness with strategically important audiences and what we see is it actually makes our efficient performance marketing, even more efficient and so feel good about our ability to measure those results and feel good about the ability to expand some campaigns that we've already been.

Doing two additional geography, and the other benefit of that.

Speaker 3: Given our scale and size, it continues that flywheel effect of referrals and word of mouth to where, you know, we're excited about the investments that we're making in Q4 mainly because then as we go into 2024, it gives us, you know, confidence and our ability to continue to deliver, you know, high growth rates that we have delivered in the past and given the payback period and LTV to CAC ratios, we feel confident about delivering as we head into 2024.

Given our scale and size as it continues that flywheel effect of referrals and word of mouth to where we're excited about the investments that we're making in queue for mainly because then as we go into 2024. It gives us confidence in our ability to continue to deliver high growth rates that we have delivered in the past and given the payback.

Matthew Oppenheimer: In addition, our overall platform availability was 99.98% in the third quarter, reflecting the technology investments we have made. Our 24-7 Global Customer Support Service is an important investment we make to protect our customers' peace of mind and resolve friction they may encounter. We are capturing significant opportunities in technology solutions to address some of the key pain points for our customers, whether through self-serve options that help customers find the information they need rapidly or the ability to amend the transaction seamlessly, while at the same time providing real-time information on the status of the transaction.

Period, and I will give you the CAC ratios, we feel confident about delivering as we head into 2024.

Speaker 5: Got it. Thanks, Matt. You actually preempted my second question, which is about 2024 visibility. Maybe you could dig a little bit more into that. I mean, I think you guys have pretty good visibility given the customers you've added thus far. Maybe talk a little bit about just the variables as you kind of think about just the sustaining high rates of growth into 2024. Anything on that front would be helpful. But thanks a lot, guys.

Got it. Thanks Man you actually preempted My second question, which is about 2024 visibility maybe you could dig a little bit more into that I mean, I think you guys have pretty good visibility given the customers. You've added does for maybe talk a lot about just a variables as you kind of think about just the sustaining high rates of growth into two.

24.

Anything on that front would be helpful. But thanks, a lot guys.

Yeah, I'll start with the kind of predictability in confidence and then I'll turn it over to a month to talk a little bit more about how that.

Matthew Oppenheimer: We have also been increasing the ability of human agents to handle more complex issues by upskilling agents and investing in technology, including artificial intelligence. These investments in delivering frictionless remittances have resulted in consistent improvements in our customer contact rates over time. You can also see the early results of these investments on the P&L, where customer support as a percentage of revenue has gone down from 10.6% to 8.3% a 230 basis point year over year improvement in the third quarter.

Speaker 3: predictability and confidence, then I'll turn it over to mom to talk a little bit more about how that, you know, squares into our 2024 thinking from a financial standpoint. But

<unk> 2024 thinking from a financial standpoint, but I think that we're any unique spot mainly because of the resilience of our of our business in terms of you think about our customers. The nondiscretionary nature of the spin the shift that is happening to digital and because of that there is a lot of predictability and a lot of resilience and our business.

Speaker 3: I think that we're in a unique spot, mainly because of the resilience of our of our business in terms of you think about our customers, the nondiscretion nature of the spin, the shift that is happening to digital.

Speaker 3: And because of that there's a lot of predictability and a lot of resilience in our business and I think that that is something that you know as we head into 2024 we're making the right investments in Q4 to give us you know confidence that we can continue to accomplish our audacious vision. But that's founded in the resilience and the tenacity and the customer base that we serve.

And I think that that is something that as we head into 2024, we're making the right investments in queue for to give us confidence that we can continue to accomplish or a decent vision, but that founded in the resilience and the tenacity and the customer base that we serve yeah. No I think thats, great Mad I think Andrew I think Matt color to buy.

Matthew Oppenheimer: While we are proud of the progress in reducing customer friction, it is clear that a significant opportunity remains to materially improve the customer experience, which will drive even more loyalty and lower costs. It's important to keep in mind that our customer support costs, which we view as directly directly attributable to friction, which drives customer contacts, are still over 8% of our revenue. This reflects an investment opportunity to most importantly decrease friction and create a reliable trusted and differentiated remittance product, which we can do with operational excellence, scale, and a digital first approach. As the customer experience continues to improve, we believe we will be able to capture additional flywheel benefits in active customer growth by building a trusted brand.

Speaker 4: Yeah, no, I think that's great, Matt. I think, Andrew, I think Matt covered a bunch of that stuff. I think when I think about it from

That sounds good I think when I think about it from.

Speaker 4: overall growth rates and so on. I think we would expect to see something pretty consistent with what we may be able to execute in this quarter.

Overall growth rates and so on I think we would expect to see something pretty consistent with what we've been able to execute in this quarter, when we dig a little bit deeper and look at customer behavior.

Speaker 4: When we dig a little bit deeper and look at customer behavior, you know, whether it's a new cohort or the existing cohorts, there's a lot of consistency in that behavior that continues to give us the confidence in terms of what we're seeing in terms of what it could translate into in terms of growth rates for next year. So that's, I think, key and we have a lot of visibility on it, so we're pretty confident that.

Whether it could you cohorts of the existing card there's a lot of consistency in that behaviour that continues to give us the confidence in terms of what we're seeing.

In terms of what it could translate into in terms of growth rates for next year.

So that's I think key and we have a we have a lot of visibility on it. So we're pretty confident that what we're seeing now in terms of <unk> behavior will be consistent the other thing I want to add here is that Q4 is a seasonally high quarter.

Speaker 4: you know, what we're seeing now in terms of cohort behavior will be consistent. The other thing I want to add here is that Q4 is a seasonally high quarter.

Matthew Oppenheimer: Evidence of the significant trust in our platform today are the approximately 1.2 million ratings for the remittly app in the app store with an average of 4.9 stars, or over 690,000 ratings in the Google Play Store with an average of 4.8 stars. We look forward to building additional customer trust with our investments to reduce friction at all stages of the transaction.

Speaker 2: which is another reason why it makes a lot of sense for us to continue to invest in marketing. While still within our guardrails, we do think that it makes sense to expand our CAC while remaining well within our LTV CAC guardrails and make sure that, you know, we can benefit from the seasonal high quarter and see the benefits of that in 2024. Makes sense. Thank you both very much.

Which is another reason why it makes a lot of sense for us to continue to invest in marketing.

While still within our Godhra as we do think that it makes sense to expand our cat.

While remaining whether within our MTV cat guardrails.

And make sure that we can benefit from the seasonal high quarter and see the benefits of that in 2024.

Makes sense. Thank you both very much.

Matthew Oppenheimer: As we look ahead, we are anchored on our vision on slide nine to transform the lives of immigrants and their families by providing the most trusted financial services on the planet. We are well on our way to delivering on this vision as we bring reliable and trusted service to millions of customers today. Looking back on our performance so far this year, I am extremely pleased that we have delivered on our promises with consistent revenue out performance and increasing returns on our investments.

Thank you.

One moment for questions.

Speaker 1: Our next question comes from Ramdiala Salad with Parklezi, May 4th.

Alright question comes from Roseola salad with Barclays. You May proceed.

Speaker 6: Hey guys, this is Allison on Ferramsey. Thank you for taking our question. So just wondering if you could dive a bit deeper into the opportunity for a rest of the world versus US and Canada. Really helpful disclosures on the start of the call. Seems like you've been making some really nice growth, but curious where you see the opportunity as it was promising. And what you think is really a sustainable level of growth for that rest of world segment going forward. Thank you.

Hey, guys. This is alison onto Ramsey. Thank you for taking a question.

Just wondering if you could <unk>.

The opportunity for the rest of the world.

Are you asking Canada.

Really helpful disclosures on the start of the call it seems like.

Thanks, some really nice.

Matthew Oppenheimer: Our strong results have demonstrated that we have been proven stewards of capital across economic cycles. We look forward to continuing to build on the trusted relationships with our customers by sharing the remotely brand story, expanding to do markets, continuously improving the remittance experience and driving complimentary new products over time to deepen our relationships with customers. Executing on this long-term vision will provide outside returns for our shareholders and deliver exceptional value to our customers.

Curious, where you see the opportunity that's promising and what you think is really a sustainable level of growth for that restaurant, where all excitement selling forward. Thanks. So much.

Speaker 3: Yeah, thanks, Allison. Good to see you. And thanks for setting in for Ramsey. Yeah, we're excited, as we mentioned, 90% rest of world growth year on year for the quarter. I think it's indicative of just how large the opportunity is across the globe, combined with our very intentional corridor expansion playbook. And so what's great is that we're getting strong dividends from investments we made quarters or years ago in terms of markets and geographies that we launched then.

Yeah, Thanks, I wasn't going to see it and thanks for seven and for Ramsey, Yes. We're excited as we mentioned, 90% rest of world growth year on year for the corner I think it's indicative of just how large the opportunity is across the globe combined with our very intentional corridor expansion playbook and so.

Hemanth Munipalli: With that, I'll turn the call to Hemanth to provide more detail on our financial results and our revised 2023 financial outlook. Thank you, Matt. I am pleased with our strong results in the third quarter and our consistent execution of the CRS. We focus on delivering strong revenue growth and improving profitability while the same time taking advantage of opportunities to acquire even more customers at robust unit economics. I will start with a review of our third quarter financial highlights and then provide additional details on our updated 2023 outlook.

What's great is that we're getting strong dividends from investments, we made quarters or years ago in terms of market and geographies that we launched then and we really haven't even started to see the returns of some of the newer markets that we launch like UAE, but we would expect to those to start showing returns in the quarters in years to come just like the the countries I mentioned that we <unk>.

Speaker 3: And we really haven't even started to see the returns of some of the newer markets that we launched like UAE, but we would expect those to start showing returns in the quarters and years to come, just like the countries I mentioned that we launched a couple of years ago.

A couple of years ago.

Speaker 3: And it's also great that we have not yet launched every country around the globe so there's room for continued growth. And what we like about the portfolio approach is that.

And it's also great that we have not yet launched every country around the globe.

So there's room for continued growth and what we like about the portfolio approach is that the rest of the world growth as I mentioned is growing 90%.

Hemanth Munipalli: I will discuss non-gap operating expenses and adjusted EBITDA and my remarks. These metrics exclude items such as stock-based compensation, the donation of the common stock in connections of our pledge 1% commitment, acquisition integration, and restructuring costs, and foreign exchange gain a loss. Reconciliation to gap results are included in the earnings release. With that, let's turn to our third quarter results beginning on slide 11 with our high-level financial performance. We delivered another quarter of greater than 40% active customer and revenue growth and increased year-over-year adjusted EBITDA profitability.

Speaker 3: The rest of world growth as I mentioned is growing 90% year on year with a lot of runway to continue to grow. But it's important to keep in mind and why I mentioned it in the call that our North America businesses, US and Canada are also growing at a very nice and healthy rate. And there's big opportunities to continue to grow there given that we're only 2% of the $1.6 trillion that's been every year.

You're on year with a lot of runway to continue to grow but it's important to keep in mind and why I mentioned it in the call that are North America businesses U S and Canada are also growing at a very nice and healthy right and there's big opportunities to continue to grow their given that we're only 2% of the 1.6 trillion dollars sent every year.

Speaker 6: Great, and you mentioned you a just any progress out of there anything about how the react we wire acquisition is integrating into remotely and should we expect any other sort of similar types of rewire acquisitions of the possibility going forward just in terms of that geographic corridor extension.

Great and you mentioned you Eh just any progress on out is there anything about how to react.

<unk>.

Integrating.

Hemanth Munipalli: Quarterly active customers grew by 42% year-over-year to 5.4 million. Send volume grew 36% year-over-year to approximately 10.2 billion dollars, all resulting in revenue growth of 43% year-over-year to $242 million. Our gap net loss was 36 million in the quarter and included 37 million of stock compensation expense, 4.6 million related to our donation of common stock for our pledge 1% commitment, and 2.9 million of acquisition integration and restructuring costs. Acquisition integration restructuring costs include 1.5 million related to the integration of rewire and 1.4 million of restructuring, which includes costs related to simplifying and scaling certain processes and teams, such as customer support to more efficiently serve our customers.

Mentally and should we expect any other sort of similar types of rewire acquisition possibility, calling Howard just in terms of that geographic corridor extension.

Speaker 3: Yeah, on a few parts of your question, on the rewire acquisition, very pleased with that acquisition and the assets that we acquire, the amazing team. And I think it's gonna help us continue to both add complimentary new products, as well as expand in regions that they are currently operating.

Yeah.

On a few parts of your question on the Rewire acquisition very pleased with that acquisition.

And the assets that we acquired the amazing team and.

And I think it's going to help us continue to.

Add.

Complimentary new products.

As well as expanding in regions that they are currently operating historically, we found that organic growth.

Speaker 3: Historically, we found that organic growth and internal builds have been the best opportunities, but we continuously review all opportunities as they become available.

Internal bills have been the best opportunities, but we continuously review all opportunities as they become available.

Speaker 3: We have a high bar for any M&A transactions and we'll remain disciplined and deploying capital on that front. So that answers that part of the question now. And then lastly, with the UAE, it's a very large market excited about the product that we have live there and launched. And as I mentioned, just the nature of how our business works, you acquire cohorts of customers, those cohorts increase over time, and then given the repeat nature of our business.

We have a high bar for any M&A transactions and will remain disciplined and deploying capital on that front. So that answers that part of the question Alison and then lastly, with the U a E.

Hemanth Munipalli: The strong growth in revenue combined with significantly lower transaction expense as a percentage of revenue led to adjusted EBITDA of 10.5 million in the quarter. As we described on our last earnings call, as our union economics remain highly attractive, we plan to make additional marketing investments in the back half of 2023 to acquire even more customers as we look forward to continued momentum in 2024 and beyond. We partially solve the inferior impact of these investments in our third quarter, adjusted EBITDA performance, and fully expect to see the benefits from these investments in 2024.

Very large market excited about the product that we have live there and launched and as I mentioned.

Just the nature of how our business worth you acquire cohorts of customers those cohorts increase over time, and then given the repeat nature of our business.

Speaker 3: that starts to build a sizable business over time. And so I'd expect that to happen in the UAE as it's happened in other corridors.

To build a sizeable business over time, and so I would expect that to happen and he has a tap in another corridor.

Speaker 7: But it takes, you know, a few quarters for that to actually ramp up. And we're on track for that. Great. Thanks so much, guys.

But it takes a few few quarters for that to actually ramp up.

And we're on track for that.

Great. Thanks, so much guys.

Hemanth Munipalli: Now let's turn to slide 12 for a detailed review of what performance in the third quarter. Let's begin with revenue which was up 43% Eurovia in the third quarter on a reported basis and 42% on a constant currency basis. A strong revenue growth was primarily driven by the 42% increase in quarterly active customers, which includes a record number of new customers acquired in the quarter and higher retention of existing customers. The large number of new customers we acquired in the quarter at highly efficient acquisition costs will primarily help drive growth in 2024 and beyond.

Thank you.

One moment for questions.

Speaker 1: Our next question comes from Robert Napoli with William Blair. He may proceed.

Our next question comes from Robert <unk> with William Blair You May proceed.

Speaker 8: Thank you. Good afternoon, Matt and Nance. Thank you for taking the question. So, Matt, when you talk about expanding the CAC in the fourth quarter, how are you thinking about that? How do you manage that? In what way are you looking to do that in maintaining your ROIs?

Hi, Thank you good afternoon.

<unk>. Thank you for taking the question.

So that when you talk about extending the cat in the fourth quarter Tomorrow.

How are you thinking about that how do you manage that in what way are you looking to do that and.

Maintaining your Roy's.

Speaker 4: Yeah, thanks, Robert, for the question. So we've I think, as we've said before, you know, we have a lot of focus on our unit economics and really focused on LTV and CAC. And as we said in the last quarter as well, that the ratios we look at that are pretty attractive and strong.

Yeah. Thanks, Robert for the questions that we've I think as we've said before we have a lot of focus on our unit economics, and we need to focus on MTV Uncac and has to be said in the last quarter as well.

Hemanth Munipalli: Underline customer behavior in the third quarter remained very strong, reflecting the nondisquestionary nature of remitances on our focus on providing a frictionless, relatively experienced revenue in the quarter was impacted by a variety of mixtures in line with normal movements in the business. As we mentioned last quarter, we continue to see a shift with digital displacement options in certain markets, which results in smaller transaction sizes and increased transaction intensity. We also continue to see revenue diversification as rest of the world revenue grew over 90% in the third quarter of 2023 compared to the third quarter 2022.

The ratio is will look at that are pretty attractive and strong when we look at Q4 in particular in cat would sequentially. We expect to increase some of that is going to be on a performance marketing site related directly to it and some of it is unrelated to our upper funneling Brian investments.

Speaker 4: When we look at Q4 in particular and you know, CAC would sequentially be expected to increase, some of that is going to be on a performance marketing side related to it and some of it is going to relate to our upper funnel and brand investment.

Speaker 4: which will take a little bit of a longer term payback on it. But we have high conviction that these brand investments, which is really backing up a sort of promise that we have to deliver for our customers and the trust we're building with them.

We'll take a little bit of a longer term payback on it but we have high conviction that'd be bad investments, which is really backing up I sort of promised that we have to deliver for our customers and the trust we're building with them.

Speaker 4: will continue to help us drive leverage and marketing in the medium to long term. So it's going to be a mix of both upper funnel and brand investments, but also a lot of sort of growth marketing, again, well within what we want to keep as our broader guardrails, but still sequentially we would expect gap to be going up.

We'll continue to help us drive leverage in marketing in the medium to long term. So it's gonna be a mix of both.

Hemanth Munipalli: We expect to continue to see midships quarter to quarter as our business evolves to be even more global driven by various factors, including customer preferences around payment and disbursement options, effects movements and geographic expansion. We expect to consistently deliver very strong revenue growth even as you scale. These investments were making in our product, marketing and our global network will help us drive robust growth in active customers and sustain higher retention. We continue to make product enhancements for the customer preferences with the focus to improve customer lifetime value.

Upper front, and and Brian investments, but also a lot of sort of growth marketing again, well within what we want to keep us are brought up guardrails, but.

But still sequentially, we would expect apt to be to be going up.

Speaker 3: Thank you. Yeah, the only thing I'd add there, Bob, is I think that as we think about the marketing investments that we're making in Q4, and in general,

Thank you.

The only thing the only thing I'd add there Bob is I think that as we think about the marketing investments that we're making in queue for and in general we have a lot of control over the amount that we choose to grow versus the amount that we choose to drive to to the bottom line and.

Speaker 3: We have a lot of control over the amount that we choose to grow versus the amount that we choose to drive to to the bottom line.

Hemanth Munipalli: As our unit costs have been declining, we have the ability to invest in delivering more value for our customers to drive long-term transaction activity and retention while maintaining strong long-term unit economics at the same time. Transaction expense as the percentage of revenue improved 580 basis points year to year as we continue to benefit from a rapidly increasing scale. Of the 580 basis point improvement and transaction expense approximately 180 basis points were due to improved economics with payment acceptance and dispersant partners as we demonstrate scale and are increasing value to our partners across our global payment acceptance and dispersant networks.

Speaker 3: And when you look at, even with a slightly expanded CAC, when you look at the LCB to CAC ratios, you look at the payback, we don't share metrics like IRR or MPV, but even with the increased cost of capital in the market, these returns are high and they're fast. And so we're making them very intentionally within our own control because we're excited about what that'll bring in 2024 and beyond.

And when you look at even with a slightly expanded CAC. When you look at the L. T V to CAC ratio do you look at the payback, we don't share metrics like IRR or MTV, but even with the increased cost of capital in the market. These returns are high and they're fast and so we're making them very intentionally within our own concur.

Role because we're excited about what that will bring in 2024 and beyond.

Speaker 8: Thank you. Then I guess just to follow up on during the quarter, you announced a partnership with MasterCardSend and you've talked a lot about direct integrations, maybe two separate questions related in a way. What does the MasterCardSend relationship bring to you? And how is the progress been on direct integrations and what effect does that had on your business? Thank you.

Great. Thank you then I guess just to follow up on during the quarter, you announced a partnership with with Mastercard sand and you've talked a lot about direct integrations, maybe two separate questions.

I related in a way what does the Mastercard <unk>.

Hemanth Munipalli: As we continue to scale, we expect additional opportunities to improve economics with our partners across both payment acceptance and disbursement networks. As Matt mentioned, we recently signed new agreements with large global payment partners. Our ability to enter into these agreements reflects the value of the additional scale that we bring on both the payment acceptance and disbursement science. These agreements also provide us with a meaningful opportunity to benefit from scale on our payment acceptance costs as a significant majority of our customers fund their transactions with debit and credit cards.

Relationship bring to you and how is the.

And does it progress band.

Direct integrations and what effect has that had on on your business.

Mmm, yes, thanks, Bob.

Speaker 3: So on the MasterCard Send and Visa Direct partnership, it enables us to send funds to Visa and MasterCard linked debit cards.

So on the on the Mastercard and visa direct partnership it enables us to send funds to visa and Mastercard linked debit cards.

Speaker 3: So it deposits into the bank account of the customer's recipient that has a bank account linked to those debit cards. And it also gives us some other just scale and cost improvements, both of those partnerships. So really grateful for the partnerships with both MasterCard and Visa.

Deposits into the bank account of the customers recipient that at the bank account linked to those debit cards and it also gives us some other just scale and cost improvements both of those partnerships. So really grateful for the partnerships with both Mastercard and visa and when you think about direct integrations, which as I mentioned is up 100 per cent compared to two years ago, what that does is it.

Hemanth Munipalli: These opportunities are ongoing and reflect the additional value and scale we bring to our partners. We also benefited from the continued improvement and fraud loss rates in the third quarter, even as we onboarded a record number of new customers. This sustained improvement reflects the investments we've made in our fraud technology which allows us to more precisely block back transactions while preserving a frictionless experience for legitimate customers. Managing fraud loss rate is always a balance between customer experience and optimizing fraud levels.

Speaker 3: And when you think about direct integrations, which, as I mentioned, is up 100 percent compared to two years ago, what that does is it creates a more reliable product at a lower cost unit cost. And you see that in our expanding margins. You see that in the 230 basis point improvement in our customer support costs.

Create a more reliable product at a lower cost unit cost and you see that and are expanding margins you see that in the 230 basis point improvement.

Our customer support costs.

Speaker 7: And so it's a win-win-win from that standpoint. And that falls into the third bucket of investments that we talked about making in terms of a frictionless remittance experience. And we're really proud of the progress there. But as I mentioned in the overview, we're just getting started in our ability to continue to drive down friction and to reduce overall costs for our customers. Thank you.

And so it's a win win win from that standpoint, and that falls into the third bucket of investments that we talked about making in terms of a frictionless remittance experience and we're really proud of the progress there, but as I mentioned in the in the overview. We're just getting started and our ability to continue to drive down friction and reduce overall cost for our customers.

Hemanth Munipalli: We're very pleased this quarter that our fraud loss rate continues to improve while the same time our customer contact rate continues to decline. And thus demonstrating that we're able to deliver less friction for our customers. However, as we've noted before, fraud losses are inherently unpredictable, especially as we continue to acquire a significant amount of new customers during the seasonally strong fourth quarter. As a result, we expect some variability in fraud loss rates in any quarter will continue to make sustainable improvements in the long term.

Okay. Thank you.

Thank you.

One moment for questions.

Speaker 1: Our next question comes from Will Nance with Goldman Sachs. You may proceed.

Our next question comes from will dance with Goldman Sachs. You May proceed.

Speaker 9: Hey guys, good evening, I'm pursuing you taking the question. I wanted to also pile on the marketing cost.

Hey, guys. Good evening I. Appreciate you taking the question I wanted to also pile on in the marketing costs.

Hemanth Munipalli: Third quarter results also reflect our focus on acquiring new customers at strong unit economics. As we mentioned last quarter, we were able to take advantage of these strong unit economics and make some targeted incremental marketing investment in the quarter, including some operational investments. We're confident that we will see strong returns from these investments in 2024 as we look to maintain higher rates of growth for many years to come. While marketing expense as a percentage of revenue was essentially flat Eurovere due to our investments, we remain focused on optimizing incremental payback and LTV to calculate show which remains strong in the quarter.

Speaker 9: Maybe, you know, a lot of the comments have been focused on, you know, the direct investments you guys are making in both Q3 and Q4. But I guess just assuming these are successful, you guys sound pretty confident that these will bear fruit, should we be thinking about these investments that you're making, all of the equals being, you know, kind of reoccurring costs in the future? And, you know, it looks like the marketing costs stepped up roughly 8 million non-GAAP sequentially. Is that, you know, roughly in line with the incremental investments you've made? It sounds like maybe that's partial quarter, a little bit higher in the fourth quarter. But, you know, is that sort of the right range as we think about kind of incrementally stepping up things like brand marketing on a go-forward basis in addition to the kind of normal performance-based marketing that we have seen in the past?

Maybe a lot of the comments have been focused on you know the direct investments you guys are making both Q3 and Q4, but I guess just assuming these are successful you guys sound pretty confident that diesel will bear fruit should we be thinking about these investments that you're making all else equal as being kind of reoccurring costs in the future and it.

It looks like the marketing costs stepped up roughly 8 million non-GAAP sequentially is that roughly in line with the incremental investments you've made it sounds like maybe that's partial quarter, a little bit higher than the fourth quarter, but is that sort of the right range. As we think about kind of incrementally stepping up things like brand marketing on a go forward basis. In addition to the kind of.

Hemanth Munipalli: CAC was relatively flat sequentially and was slightly up Eurovere reflecting these additional investments. We continue to benefit from optimizing localized digital marketing, increased creative velocity, improving brand awareness, what amount of facts and increasing scale in our business outside of North America. In the third quarter, customer support and operations expenses were down 230 basis points Eurovere as a percentage of revenue as we continue to see leverage on this line item. We expect to continue to drive efficiencies from increasing automation and reducing friction as well as our improvements in fraud precision which help drive down contract rates.

Normal performance based marketing that we have seen in the past.

Speaker 4: Yeah, let me try to give you an answer. Well, thanks for the question in terms of the run rate question and turning back to Matt to maybe give a broader response to your question there. I mean, first of all, I think, you know, I don't think run rate net still is the way to think about this about our investments we're making on the brand marketing side. First of all, the way we looked at brand marketing and our professional investments, they really tend to spread across the entire customer base versus...

Thanks.

Yeah, Let me, let me try to give you an answer well. Thanks for the question in terms of sort of a run rate question and then turn it back to Matt maybe give a broader broader response to your question there.

First off I think.

I don't I don't think run red necessarily the way to the way to think about this.

About our investments, we're making on the brand marketing side.

Most of the way, we looked at Brian marketing and I'll profiling that smoke, they really tend to spread across the entire customer base versus Jeff.

Speaker 4: just the new customer acquisitions, which is a lot of what our performance marketing is directed towards. So we do expect to get leverage on it as we get bigger, bigger in terms of our base of customers, which includes both obviously, the after customers includes both the new customers as well as...

Just a new customer acquisition, which is a lot of what our performance marketing is directed toward so we do expect to get leverage on it as we get bigger and bigger in terms of our base of customers, which includes both obviously the active customers includes both the new customers as well as co.

Hemanth Munipalli: Technology and development expenses increase 160 basis points Eurovere and reflect the long term return investments. We're making in a relative platform to reduce friction for customers, improve fraud risk and compliance technologies, develop complimentary new products and increase automation across customer service and back in transaction processing. We can see some of the benefits from these investments in the leverage we're seeing in transaction and customer support expenses. We expect to continue to invest in delivering a superior experience for customers are excited about the returns we're currently seeing including strong active customer growth and improvement in customer support costs as well as future returns are investments will deliver as our product continues to get better.

Speaker 4: you know cohorts of existing customers. So we do think that overall, you know, we will have some delivery in terms of CAC in Q4. But as we look forward to 2024, and we will talk about guidance next year, we'll be able to share more in terms of, you know, how these efficiencies we've been doing over the last several years in terms of marketing, how that ends up. But we have high conviction that these investments would deliver returns at 2024 and beyond.

Cohorts of existing customers. So we do we do think that overall will be we will have some deleverage in terms of cack in queue for but as we look forward to 2024, and maybe talk about guidance next year will be able to share more in terms of how.

How these efficiencies we've been doing over over the last several years in terms of marketing are that bad.

But we have high conviction that these investments will deliver begun to the 2024 and beyond.

And you can go ahead man.

Speaker 3: Yeah, the only thing I'd add, Will, is I think that.

Yeah, the only thing I would add well is I think that.

Speaker 3: With marketing investments specifically, I think you know that we have a lot of discipline around our unit economics and the way we look at it is within the LTV to CAC ratios and within the

With with marketing investments specifically.

Hemanth Munipalli: In the third quarter, GN expense is a percentage of revenues flat Eurovere we continue to focus on moderating overall growth rates in both heck count and non heck count expenses while targeting higher productivity. Our gap net loss in the quarter was 36 million compared with 33 million in the third quarter 2022. Our net loss included 37 million of stock compensation expense in the third quarter compared with 26 million in the third quarter of last year. We're actively focused on managing stock-based compensation and have made adjustments to compensation structures in order to maintain an appropriate balance between rewarding employees for the value that deliver while managing shared valuation.

I think.

Know that we have a lot of discipline around our unit economics and the way we look at it is within the L. T V to CAC ratios and within the.

Speaker 3: payback periods that we've defined, we're willing to spend to get the right amount of customers to be able to drive both 2024 and long-term growth. And I think that's a continuation, even as we talk about upper funnel or brand investments, we've been doing that. We're doing a bit more in Q4 for the reasons we've talked about.

Payback periods that we've defined.

We are willing to spend to get the right amount of customers to be able to drive 2024, and longterm growth and I think that's a continuation even as we talk about upper funnel random investments, we've been doing that we're doing a bit more in queue for for the reasons we've talked about.

Speaker 3: But you can see very clearly the return on that in a short timeframe. And we're excited about that because we've got that both an audacious vision that we're working to accomplish. And Q4 is a time for us to set up 2024 for success. And so we're excited about the investments we're making in our-

But you can see very clearly the return on that in a in a short timeframe and we're excited about that because we've got a bold and audacious vision that we're working to accomplish and Q4 a time for us to set up 2024 for success and so we're excited about the investments we're making in order to do that.

Hemanth Munipalli: Our focus for 2020 and beyond remains 4 key areas to drive sustainable long term returns as you can see on slide 13. These are to continue to deliver strong revenue growth, improve transaction expense, sustain or improve marketing efficiency while delivering new customers at strong units economics and increase scale efficiencies in other operating expenses. We are proud of our execution this year as we've delivered both higher than expected revenue growth, making targeted investments for the longer term while demonstrating operating leverage and sustainably increasing adjusted EBDA profitability. We're in a strong position to be able to make this investment to ensure future growth while also delivering scale benefits to drop to the bottom line.

Speaker 9: That makes sense. I mean, just to put a final point on it, you said you wouldn't characterize it as run rate. But so does that mean we should expect these costs to come down all of SQL then? Or are you saying we don't make incremental investments on top of this? And we scale over these costs over time as the customer gets bigger.

That makes sense I mean, just to just to put a finer point on it you said you wouldn't characterize it as run rate, but so does that mean, we should expect these cost to come down all else equal then or are you, saying like we don't make incremental investments on top of that.

We kind of scale over these costs over time as a customer base gets bigger.

Speaker 4: Yeah, I think well, I think the way I mean, a lot of this is a question of timelines. And what we're talking about here is we look forward into sort of 2024 in the mid and the mid long term.

Yeah, I think I think the way I mean, a lot of this is a question of timelines and who we're talking about here is we look forward and just sort of 2024 in the <unk> in the mid long term.

Speaker 4: we do expect to continue to be able to drive leverage.

We do expect to continue and continue to be able to drive leverage in our marketing spent we think the word amount effects that Matt talked about as well and these bad investments will ultimately help US also drive down performance marketing class and continue to get leverage on it. It's a question of time horizons.

Hemanth Munipalli: Delivering on these priorities has allowed us to increase our outlook for both revenue and adjusted EBDA in 2023 again as you can see on slide 14. Our expectations for continued trend and customer activity from the record number of new customers we have recently added this year and the resilience for upper existing customers. We expect adjusted EBDA to be between $36 million and $41 million which is a $2 million increase at the midpoint from our prior outlook.

Speaker 4: in our marketing spend. We think the word amount of X that Matt talked about as well, and these grant investments will ultimately help us also drive down performance marketing costs.

Speaker 9: and continue to get leverage on it. It's a question of time horizons, but we look forward to 2024. In particular, we've got a high conviction that these investments were making now in the fourth quarter of this year will deliver returns for us next year. Understood. Okay, I appreciate you taking the questions.

But we look forward to 2024 in particular.

Hi conviction that these investments, we're making now in 2004.

Quarter of this year.

Deliver a return for us next year.

Understood. Okay. I appreciate you taking the questions.

Thank you.

One moment for questions.

Speaker 1: Our next question comes from Alex Markgraf with KeeBank, you may proceed.

Our next question comes from Malik Smart growth with Keybanc you May proceed.

Speaker 10: Hey, thanks for taking my questions. Maybe just not to overplay it, but just one more on the kind of marketing piece of that side of things and unit economics.

Hey, Thanks for taking my questions, maybe just not to overplay it but just one more on the kind of marketing piece of that side of things in your economics, you all talk a lot about guard rails, which I think is kind of thoughtful context I'm just curious as you sit today in making some of these new investments kind of.

Hemanth Munipalli: The increase in our adjusted EBDA outlook is primarily driven by a strong performance in the third quarter. On our expectations of continued strong performance in the fourth quarter offset by the near-term impact of our previously discussed incremental marketing investments. Given the seasonality of remittance and the fourth quarter provides the best opportunity acquired new customers and make additional high return marketing investments. We expect these investments to deliver high long-term returns and also drive strong growth in 2024.

Speaker 10: You all talk a lot about guardrails, which I think is kind of helpful context. I'm just curious as you sit today and making some of these investments, if you think about the higher end of those guardrails, any sort of context to help us think about where you sit today versus what may be

If you think about the the.

Higher end of those those guard rails, just any sort of context to help us think about where you sit today versus what maybe you're comfortable with it at the top end or the.

Far side of that guard rail.

Speaker 4: Yeah, maybe let me try to give you some color and context on it, thanks for the question. I think we've said, as we've said before, and including last quarter that an MTV CAC ratio of six is a pretty attractive unit economics place to be in. And we think we've got some room here to be able to make further investments, particularly as we've been talking about in terms of marketing, and still have really robust and attractive unit economics. When we look at this internally,

Yeah, maybe let me try to give you some color in context, Alex. Thanks for the question I think we've said.

Hemanth Munipalli: 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 macroeconomic and effects assumptions remain relatively stable to what we've seen in the third quarter of 2023 and we expect continued resilience and customer behavior across our diverse fight portfolio of quarters. Our balance sheet remains the source of strength to ensure we can fund our high return investments. At the end of the quarter, we had $223 million of cash and access to a $250 million working capital facility.

<unk> said before and including last quarter and MTV cap ratio of sixes is a pretty attractive.

Unit economics place to be in and we think we've got some room here to be able to.

To make further investments, particularly as we've been talking more in terms of marketing and still have really robust and attractive unit economics. When we look at this internally.

Speaker 4: We also look at this from an incremental payback and gap perspective as well as look at sort of the NPV of these investments. And we feel pretty comfortable by looking at and triangulating it on multiple places. The returns we expect to generate from this in the horizons we're looking at makes a lot of sense.

We also look at this from an incremental payback in capp perspective, as well as look at sort of the NPV abuse of these investments and we feel pretty comfortable by looking at Triangulating on multiple places that.

Hemanth Munipalli: Similar to last quarter, a reported cash balance as of September 30th was impacted by timing as the quarter ended on a weekend when we typically have higher pre-funding requirements to ensure funds are available to our customers. Overall, we have been very pleased by the consistent execution of our business model and strategy, which has been able to deliver consistent greater than 40% revenue growth, improving adjusted EBDA margins and high returns on all our investments. We remain focused on allocating capital to the highest return investments to ensure we can deliver the strong financial performance over the long term.

Returns, we expect to generate from this in the Horizons, we're looking at makes a lotta sense.

Speaker 3: And I would say Alex, the only thing I'd add on that front is, you know, I feel very good about both the average and incremental tax on the marketing investments that we're making right now. And I think what you see in the guide is we raised a subsidy but a guidance had we decided not to invest as much in some of the marketing investments in Q4, which we can always choose to dial up or dial down. Then what you would see is dialing up or down our confidence when we eventually guide to 2024 growth.

And I would I would say Alex the only thing I would add on that front is.

Feel very good about both the average and incremental cack on the marketing investments that we're making right now and I think what you see in the guide as we raised adjusted EBITDA guidance.

Had we decided not to invest as much in some of the marketing investments and keyboard, which we can always choose the dial up or dial down than what you would see is dialing up or down or confidence when we eventually guide to 2024 growth.

Speaker 3: But because of the fact that we, A, wanted to raise guidance, B, we're in control of how much we're spending and growing, and C, that the marginal and average payback are very good right now, I think that we're threading that needle to invest the right amount for the long term in Q4. And by long term, I mean we'll get the return from those investments in 2024.

But because of the fact that we Ain't wanted to raise guidance B. We're in control of how much we're spending.

Operator: With that, Matt and I will open up a call for your questions. Operator. Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One second.

And growing and see.

The marginal and averaged payback or <unk>.

Very good right now I think if it were threading that needle to invest the right amount for the longterm in Q4 and my longterm.

We will get that the return from those investments in 2024.

And we're being very intentional about dialing those those levers up and down to kind of balanced growth and profitability not only in queue for but also in 2024 hours do we think about next year.

Andrew Schmidt: Our first question goes from Andrew Schmidt with city he may proceed. Hey, Matt. Hey, I'm off. Thanks for taking my questions here and good to see the revenue momentum. I want to start off on the marketing side of things and I think it makes sense investing more given that the LTV has stepped up and you can maintain the track to view the economics. But maybe a couple questions on that front. First, maybe you could just talk about cactus or seeing in performance marketing.

Speaker 10: That's great. Thank you. So that I think probably makes the next question a bit easier. But just in terms of, you know, the implied EBITDA margin and the fourth quarter, I mean, I think it's pretty clear a lot of that is kind of marketing investment related. Just curious, Hemant, anything on the transaction expense line to consider for the fourth quarter?

That's that's great. Thank you. So I think probably makes it the next question a bit easier, but just in terms of.

Andrew Schmidt: And then second, if you shift to more top of funnel marketing and things like that, you can just talk about your confidence in the efficiency of those initiatives and ability to scale those over time. Those areas will be helpful. Thanks a lot, guys. Thanks, Andrea. Good to see you and appreciate the question. Yeah, on the marketing front, we are excited about the integrated brand campaigns. And I'd say that it's a continuation and expansion of a playbook that we've already started to roll out and have proven to be successful.

<unk> you could die margin in the fourth quarter earnings pretty clear a lot of that is kind of marketing investment related just curious a month anything on the transaction expense line to consider.

For the fourth quarter.

Speaker 4: Yeah, no, look, I think broadly, I think the transaction expense line we've been really pleased with the progress we've made.

Yeah, No look I think broadly I think the transaction expense line, we have been really pleased with the progress we've made both in sort of driving down using pay and then pay out costs, which are basically related to economics with our partners. Both on the payment side on the disbursement side and as well as I think we've talked about the advances in terms of fraud.

Speaker 4: both in sort of driving down reducing pain and payout costs which are basically related to economics with our partners both on the pain side and the disbursement side and as well as I think we've talked about the advances in terms of fraud management.

Speaker 4: while keeping the friction with our customers low. So we would expect that the trajectory on that will be consistent as we look forward to, you know, this quarter or subsequent quarters into next year. I think what's important to point out is Q4 is seasonally high and I think as we look at that with a record number of customers would generally add and afford a like this, they could be cases where we might see some.

<unk>, while keeping the friction with our customers low so we would expect that the trajectory on that will be consistent as we look forward to this quarter or subsequent quarters into next year I think what's important to point out is Q4 seasonally high and I think as we look back with a record number of customers with generally add in a quarter like this.

Andrew Schmidt: And an example of that would be like an integrated marketing campaign that we did in the Miami area where we're seeing the dividends from. That's because it drives long-term awareness with strategically important audiences. And what we see is it actually makes our efficient performance marketing even more efficient. And so feel good about our ability to measure those results and feel good about the ability to expand some campaigns that we've already been doing to additional geographies.

There could be cases, where we might see some increase of fraud levels, which we plan for but we are actively monitoring but that's the only I would say call out, particularly with regard to four but the trends are very favorable in terms of driving continuing margin improvement.

Speaker 4: increased fraud levels, which we plan for, but we are actively monitoring. But that's the only, I would say call out, particularly with regard to Q4, but the trends are very favorable in terms of driving continued margin improvement.

Great. Thank you both.

Speaker 1: Thank you. And as a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Thank you and is there a.

Andrew Schmidt: And the other benefit of that given our scale and size is it continues that flywheel effect of referrals and word of mouth to where we're excited about the investments that we're making in Q4 mainly because then as we go into 2024, it gives us confidence and our ability to continue to deliver high growth rates that we have delivered in the past and given the payback period. And LTV to CAC ratios, we feel confident about delivering as we head into 2024.

Reminder, to ask a question. Please press star one one on your telephone and wait for your name to be announced.

One moment for questions.

Speaker 1: Our next question goes from David Sharf with JMP Securities. You may proceed.

Our next question comes from David Sharp with JMP Security. So you May proceed.

Speaker 11: Hi, good afternoon. Thanks for squeezing me in here. I I apologize if if these have been asked them.

Yeah. Good afternoon, Thanks for squeezing me in here.

I apologize if if these have been asked them.

Speaker 11: jumping, bouncing between three or four different calls. I am already assuming there've been about six questions about the fourth quarter marketing plans. So I'll pass on that. But Matt, you know, not sure if you covered this already, but is there any incremental commentary?

Jumping bouncing between three or four different calls I am already assuming there've been about six questions about the fourth quarter marketing <unk>.

Matthew Oppenheimer: Got it. Thanks, Matt. You actually preempted my segment question, which is about 2024 visibility. Maybe you could dig a little bit more into that. I mean, I think you guys have pretty good visibility given the customers you've added dust for. Maybe talk a little bit about this the variables as you kind of think about just the sustaining high rates of growth into 2024. Anything on that front would be helpful. But thanks a lot guys.

Plans, so I'll pass on that.

But <unk>.

Not sure if you've covered this already but is there any incremental commentary.

Speaker 11: just on not just the competitive environment, but in particular.

Just on.

Not just the competitive environment, but in particular.

Matthew Oppenheimer: Yeah, I'll start with the kind of predictability and confidence. Then I'll turn it over to mom to talk a little bit more about how that squares into our 2024 thinking from a financial standpoint. But I think that we're any unique spot mainly because of the resilience of our of our business in terms of you think about our customers, the non discretion nature of spend the shift that is happening to digital. And because of that, there's a lot of predictability and a lot of resilience in our business.

Speaker 11: you know, where some where the where the newer customers lately have been coming from. And specifically, as we kind of reference the stepped up investment in digital from Western Union, for example, we have less visibility in the MoneyGram now that they're private. But.

You know, where where where are the newer customers lately have been coming from it and specifically as we kind of <unk>.

<unk> stepped up investment in digital from Western Union. For example, we have less visibility in the Moneygram now that the private but.

Speaker 11: Is the profile of your new ads changing at all? Meaning, are they first-time digital remitters and do you have a chance to kind of maintain the loyalty? Do you get a sense that they're folks that have used Western Union or other providers and the stickiness is still in question?

Is the profile of your new ads changing at all meaning are they first time digital <unk> and you have a chance to kind of maintain the loyalty did you get a sense that there.

Matthew Oppenheimer: And I think that that is something that as we head into 2024, we're making the right investments in Q4 to give us confidence that we can continue to accomplish our adacious vision. But that's founded in the resilience and the tenacity and the customer base that we serve. Yeah, no, I think that's great, Matt. I think I'm doing Matt covered a bunch of that stuff. I think when I think about it from overall growth rates and so on, I think we would expect to see something pretty consistent with what we may able to execute in this quarter.

Folks that have used western union or other providers and the stickiness is still in question.

Uh-huh.

Speaker 3: Yeah, thanks, David. Great, great questions and good to see you. I think that the headline on the competitive landscape is there have been no material changes in the last quarter.

Yeah, Thanks, David Great great questions and get to see I think that that that the headline on the competitive landscape is there have been no material changes in the in the last quarter I think that the structural changes in the industry meeting shift to digital and I'd say that is coming from a wide range of customers whether that say.

Speaker 3: I think that the structural changes in the industry, meaning shift to digital, and I'd say that is coming from a wide range of customers.

Matthew Oppenheimer: When we dig a little bit deeper and look at customer behavior, you know, whether it's a due cohort, so the existing cohort, there's a lot of consistency in that behavior that continues to give us the confidence in terms of what we're seeing in terms of what it could translate into in terms of growth rates for next year. So that's I think key and we have a lot of visibility on it. So we're pretty confident that, you know, what we're seeing now in terms of cohort behavior will be consistent.

Speaker 3: whether that's a, you know, scaled legacy player, whether that's subscale legacy players who have difficulty building out a

A scaled legacy player whether that sub scale legacy players, who have difficulty building out a viable trusted reliable digital solution or whether that's other digital players that are maybe subscale and not able to provide the reliable service. We do we're seeing a shift from a wide range of.

Speaker 3: viable, trusted, reliable digital solution, or whether that's other digital players that are maybe subscale and not able to provide the reliable service we do.

Speaker 3: We're seeing a shift from a wide range of competitors when you think about our new customer acquisition.

Matthew Oppenheimer: The other thing I want to add here is that Q4 is a seasonally high quarter, which is another reason why it makes a lot of sense for us to continue to invest in marketing. While still within our Godrails, we do think that it makes sense to expand our CAQ while remaining well within our MTV CAQ Godrails. And make sure that, you know, we can benefit from the seasonal high quarter and see the benefits of that in 2024.

Competitors, when you think about our new customer acquisition, and we think that we're uniquely positioned given our scale given our operational excellence and given our digital first approach.

Speaker 3: And we think that we're uniquely positioned given our scale, given our operational excellence, and given

Speaker 3: our digital-first approach, and you see that in our overall quarterly active user growth.

Matthew Oppenheimer: Make sense. Thank you both very much. Thank you.

You see that in our overall quarterly active user growth.

Speaker 3: and the resilience of our existing customers coming back again and again, as well as new customers that are increasingly choosing us because of things like word of mouth and others that are recommending their service to their friends.

And the and the resilience of our existing customers coming back again, and again as well as new customers that are increasingly choosing us because of things like word of mouth and others that are recommending.

Operator: One moment for questions.

Their service to their friends.

Speaker 11: Got it, he it maybe just as a follow up.

Got it.

Maybe just as a follow up.

Speaker 11: You know, on the marketing side, you know, when you make in comment or provide an observation that you believe.

On the marketing side.

Allison Gelman: Our next question comes from Ramsey, L.S.A, with Parkways, you may proceed. Hey guys, this is Allison on for Ramsey. Thank you for taking our question. So just wondering if you could dive a bit deeper into the opportunity for the rest of the world versus US and Canada. Really helpful disclosures on the start of the call. Seems like you've been making some really nice growth, but curious where you see the opportunity as it was promising.

When when you make an.

Comment or provide an observation that you believe.

Allison Gelman: And what you think is really a sustainable level of growth for that rest of world segment going forward. Thanks so much. Yeah, thanks Allison. Good to see you. And thanks for a seven in for Ramsey. Yeah, we're excited as we went to 90% rest of world growth year on year for the quarter. I think it's indicative of just how large the opportunity is across the globe, combined with our very intentional corridor expansion playbook.

Speaker 11: the LTV to CAC ratio is trending upward. Can you provide a little more?

The L T V to CAC ratio is trending upward.

Can you provide a little more.

Speaker 11: meet around the bones in terms of, you know, where is that incremental lifetime value coming from? Is it based on a sense that your average principal percent is increasing? Are you seeing something innate that tells you the average velocity or number of, you know, sends per year is increasing? What actually takes up an LTV?

Meet around the bones in terms of.

Where is that incremental lifetime value coming from it is is it based on a sense that.

Your average principal percent is increasing or are you seeing something innate that tells you. The average velocity. Your number you know cents per year is increasing what what actually takes up an L television.

Speaker 4: Yeah, great question, David, let me let me try to answer that for you. I think first off, when we look at LTV, just as a reminder, it's really sort of our cumulative transaction profit we would expect to get from our customers and cohorts. And there's two components of that that is giving us confidence that we are improving our LTV.

Yeah, Great question, David Let me, let me try to answer that for you I think first off when you look at a L. T V. Just as a reminder, it's really sort of our cumulative transaction profit and would expect to get from our customers uncle hugs and there's two components. So that that is giving us confidence that we are improving.

Allison Gelman: And so what's great is that we're getting strong dividends from investments we made quarters or years ago in terms of markets and geographies that we launched then. And we really haven't even started to see the returns of some of the newer markets that we launched like UAE, but we would expect those to start showing returns in the quarters and years to come just like the countries I mentioned that we launched a couple years ago.

Improving our LTV one is our interest transaction intensity I think being also disrupt first can at scale, we're seeing increasing digital transactions.

Speaker 4: One is around transaction intensity. I think being also digital first and at scale, we're seeing increasing digital transactions and the intensity of those transactions is increasing and that's across our active customer base. So that intensity increased coupled with a transaction margin, which has continued to improve for the reasons we've described previously around scale for pay in and pay out costs and some of the work that's been done on the fraud side.

That if any of those transactions are increasing and that's across across our active customer base, so that intensity increase coupled with a.

Allison Gelman: And it's also great that we have not yet launched every country around the globe. So there's room for continued growth. And what we like about the portfolio approach is that the rest of world growth as I mentioned is growing 90% year on year with a lot of runway to continue to grow, but it's important to keep in mind and why I mentioned it in the call, that our North America businesses, US and Canada are also growing at a very nice and healthy rate. And there's big opportunities to continue to grow there, given that we're only 2% of the $1.6 trillion cent every year. Great.

Transaction margin, which has continued to improve for the for the reasons. We have described previously around a scale for pain and payout costs and some other work that's been done on the <unk> side gives.

Speaker 11: gives us high conviction and just analytics around LTV on a good trajectory. So those are the key components there. Very helpful. Thanks so much.

Gives us a high conviction and just analytics around L.

LTV on a trajectory so those are the key components Sir.

Very helpful. Thanks, so much.

Thank you.

One moment for questions.

Speaker 1: Our next question comes from Tenson Wong with KP Morgan, you may proceed.

Our next question comes from tension along with.

Matthew Oppenheimer: And you mentioned UAE, just any progress out of there, anything about how the rewire acquisition is integrating into remotely and to be expect any other sort of similar types of rewire acquisitions of possibility going forward just in terms of that geographic corridor extension. Yeah. On a few parts of your question, on the rewire acquisition, very pleased with that acquisition and the assets that we acquire, the amazing team. And I think it's going to help us continue to both add complementary new products as well as expand in regions that they are currently operating.

J P. Morgan you May proceed.

Speaker 12: I think so much good afternoon everybody. I know you've covered a lot already. Just wanted to ask Matt on visibility if you don't mind. And if it's changed here in the last 90 days, there's a lot of going on with your political world and pricing, competitive actions, regulations, just as curious if you feel like the visibility has changed in your mind.

Hi, thank so much good afternoon, everybody I know you've covered a lot of it I just wanted to ask Matt on on visibility. If you don't mind, if it's changed here in the last 90 days is a lot of going on with geopolitical world.

Pricing competitive actions regulation, just just curious if you feel like the visibility it's changed in your mind.

Speaker 12: And, Tintin, when you talk about visibility, you're talking about, you know, forward-looking kind of, yeah, what do you mean exactly? Yeah, exactly. Visibility into the financial outlook and the short-term as well as just the behavior on the consumer side, if anything surprised you. I know you've covered a lot of that already, but just wanted to check on changes in visibility. Thank you.

Mmm intention when talking about visibility you're talking about forward looking kind of.

What do you mean again, yeah exactly visibility into the essential outlook in the short term as well as just the behavior on the consumer side, if anything surprised you're gonna you know you've covered a lot of it already but just wanted to check on yeah on changes invisibility. Thank you.

Speaker 3: Thanks, Centennial. Yeah, good to see you. I think that one of the things that is unique about remittances and specifically remittly, and how we both manage the business and who our customers are, the nondiscretionary nature.

Thanks to Anthony are going to see it I think that one of the things that is unique about.

Matthew Oppenheimer: Historically, we found that organic growth and internal builds have been the best opportunities, but we continuously review all opportunities as they become available. We have a high bar for any M&A transactions and will remain disciplined and deploying capital on that front. So that answers that part of the question now. And then lastly with the UAE, it's a very large market excited about the product that we have live there and launched. And as I mentioned, just the nature of how our business works, you acquire cohorts of customers, those cohorts increase over time, and then given the repeat nature of our business, that starts to build a sizable business over time.

Remittances and specifically mentally and how we both manage the business and who our customers are the nondiscretionary nature of them, sending money is a bit more predictability and resilience we've seen that over the last decade of running.

Speaker 3: of them sending money is a bit more predictability and resilience. We've seen that over the last decade of running the business, we've seen that in World Bank studies in the past. There's a predictability, especially when you look at the business from a cohort view and a resilience, especially when you understand why funds are sent home, whether that's...

Running the business, we've seen that and World Bank studies in the past.

There's a predictability, especially when you look at the business from a cohort meal and a resilience, especially when you understand why funds are sent home, whether that's emergency medical expenses natural disasters, sometimes when there's tragedy, there's actually a greater need for remittances.

Speaker 3: emergency medical expenses, natural disasters. Sometimes when there's tragedy, there's actually a greater need for remittances and you know we've seen that over quite a few cycles so

Matthew Oppenheimer: And so I'd expect that to happen in the UAE as it happened in other corridors. But it takes a few quarters for that to actually ramp up and we're on track for that. Great. Thanks so much, guys. Thank you.

And we've seen that over a quite a few cycles. So.

Operator: One moment for questions.

Speaker 3: I would come back to our customers and gratitude for them and that being the case that we have more predictability and visibility to our business. But that's one of the reasons is we start thinking about talking about 24, we're excited about what's to come.

I would come back to our customers and gratitude for them and that being the case that we have more predictability and visibility to our business, but that's one of the reasons as we start thinking about and talking about 24 were excited about what's to come.

Robert Napoli: Our next question comes from Robert Napoli with William Blair. You may proceed. Thank you.

Thank you.

Matthew Oppenheimer: Good afternoon, Madden Mance. Thank you for taking a question. Matt, when you talk about expanding the CAC in the fourth quarter to month, how are you thinking about that? How do you manage that? In what way are you looking to do that and maintaining your ROI? Yeah, thanks, Robert, for the question. I think as we've said before, we have a lot of focus on our unit economics and we focus on LTV and CAC.

One moment for next question.

Speaker 1: Our next question comes from Daniel Krebs with Wolf Research. You may proceed.

Our next question comes from Daniel Crabs with Wolf Research you May proceed.

Daniel Krebs your line is now open.

Speaker 1: And I would not like to turn the call back over to Matt Almondheimer for any closing remarks.

And I would not like to turn the call back over to <unk> for any closing remarks.

Matthew Oppenheimer: We said in the last quarter as well that the ratios we look at that are pretty attractive and strong. When we look at Q4, in particular, and CAC would sequentially expect to increase, some of that is going to be on a performance marketing side related directly to it. And some of it is going to relate to our upper funnel and brand investments, which will take a little bit of a longer term payback on it, but we have high conviction that these brand investments, which is really backing up a sort of promise that we have to deliver for customers and the trust we're building with them will continue to help us drive leverage and marketing in the medium to long term.

Speaker 3: Thanks, Operator. And thanks, everyone, for the thoughtful questions. As we always do at Remitly, I'd like to end the call by highlighting one of our amazing customers whose name is Alexis. And Alexis sends money from Australia to her family in the Philippines. And Alexis was one of the many new customers we added this year and reflects the increasing diversity of our Corridor portfolio. And Alexis shared, this app is awesome. Try it. It is fast and easy. I love it.

Thanks, a lot better and thanks, everyone for the thoughtful questions as we always do a <unk> I'd like to end the call by highlighting one of our amazing customers, whose name is Alexis and Alexa send money from Australia to her family in the Philippines, and a Lexus was one of the many new customers. We added this year and riff.

Flex the increasing diversity of our core to our portfolio and Alexis shared this app is awesome try it it is fast and easy I love it.

Speaker 3: We thank Alexis for her loyalty to Remitly and appreciate her recommendation for others to try our service. Thanks everybody for joining us and we appreciate your support. We're excited about the opportunities ahead of us as we in the year and as we look forward to sharing more of our progress in 2024.

We think a lexus for her loyalty to remit Lee and appreciate her recommendation for others to try our service.

Matthew Oppenheimer: So it's going to be a mix of both upper funnel and and brand investments, but also a lot of sort of growth marketing. Again, well within what we want to keep as our broader guardrails, but still sequentially we would expect that to be to be going up. Thank you. The only thing I'd ask the only thing, yeah, the only thing I'd add there about is I think that as we think about the marketing investments that we're making in Q4 and in general, we have a lot of control over the amount that we choose to grow versus the amount that we choose to drive to to the bottom line.

Thanks, everybody for joining us and we appreciate your support we're excited about the opportunities ahead of us.

As we end the year and as we look for and we look forward to sharing more of our progress in 2024.

Speaker 1: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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

Matthew Oppenheimer: And when you look at even with a slightly expanded CAC, when you look at the LCV to CAC ratios, you look at the payback, we don't share metrics like IRR or MPV, but even with the increased cost of capital in the market, these returns are high and they're fast. And so we're making them very intentionally within our own control because we're excited about what that'll bring in 2024 and beyond. Great. Thank you.

Goodbye.

Mmm.

[music].

Okay.

[music].

Robert Napoli: Then I guess just to follow up on during the quarter, you announced the partnership with with master card send and you've talked a lot about direct integrations, maybe two separate questions related in a way. What does the master card send relationship bring to you? And how is the progress been on direct integrations and what effect is that had on on your business? Yeah, thanks Bob. So on the on the master card send and visa direct partnership, it enables us to send funds to visa and master card links debit cards.

Robert Napoli: So it deposits into the bank account of the customers recipient that had the bank account linked to those debit cards, and it also gives us some other just scale and cost improvements both of those partnerships. So really grateful for the partnerships with both master card and visa. And when you think about direct integrations, which is I mentioned is up 100% compared to two years ago. What that does is it creates a more reliable product at a lower cost unit cost, and you see that in our expanding margins, you see that in the 230 basis point, you know improvement in our customer support cost.

Robert Napoli: And so it's a win-win-win from that standpoint, and that falls into the third bucket of investments that we talk about making in terms of a frictionless remittance experience, and we're really proud of the progress there. But as I mentioned in the overview, we're just getting started in our ability to continue to drive down friction and to reduce overall costs for our customers. Thank you. One moment for questions.

William Nance: Our next question comes from Will Nance with Goldman Sachs. You may proceed. Hey guys, good evening. I appreciate you taking the question. I wanted to also pile on the marketing costs. Maybe, you know, a lot of the comments have been focused on the direct investments you guys are making in both Q3 and Q4, but I guess just assuming these are successful, you guys sound pretty confident that these will bear fruit. Should we be thinking about these investments that you're making, all of the equals being, you know, kind of reoccurring costs in the future, and, you know, it looks like the marketing cost stepped up roughly 8 million non-gaps sequentially, is that, you know, roughly in line with the incremental investments you've made.

William Nance: It sounds like maybe that's partial quarter, a little bit higher in the fourth quarter, but, you know, is that sort of the right range as we think about kind of incrementally stepping up things like brand marketing on a go forward basis in addition to the kind of normal performance based marketing that we have seen in the past. Thanks. Yeah, let me, let me try to give you an answer.

Hemanth Munipalli: Well, thanks for the question in terms of sort of the run rate question and turning back to Matt to maybe give a broader, broader response to your question there. I mean, first off, I think, you know, I don't, I don't think run rate net still is the way to, the way to think about this about our investments we're making on the brand marketing side. First off, the way we looked at brand marketing and our professional investments, they really tend to spread across the entire customer base versus just the new customer acquisitions, which is a lot of what our performance marketing is directed towards.

Hemanth Munipalli: So we do expect to get leverage on it as we get bigger, bigger in terms of our base of customers, which includes both, obviously, the after customers includes both the new customers, as well as, you know, cohorts of existing customers. So we do, we do think that overall, you know, we'll be, we will have some delivery in terms of CAC in Q4, but as we look forward to 2024 maybe talk about guidance next year, we'll be able to share more in terms of you know, how these efficiencies we've been doing over over the last several years in terms of marketing, all that bad stuff, but we have high conviction that these investments would deliver returns at 2024 and beyond.

Hemanth Munipalli: Anything to add Matt? Yeah, the only thing I'd add will is, I think that with marketing investments specifically, I think you know that we have a lot of discipline around our unit economics, and the way we look at it is within the LTV to CAC ratios and within the payback periods that we've defined. And we're willing to spend to get the right amount of customers to be able to drive both 2024 and long-term growth.

Hemanth Munipalli: And I think that's continuation, even as we talk about upper funnel or brand investments, we've been doing that, we're doing a bit more in Q4 for the reasons we've talked about. But you can see very clearly the return on that in a short timeframe. And you know, we're excited about that because we've got a bold and audacious vision that we're working to accomplish and Q4 is a time for us to set up 2024 for success.

Hemanth Munipalli: And so we're excited about the investments we're making in order to do that. That makes sense. I mean, just to put a final point on it, you said you wouldn't characterize it as run rate. So does that mean we should expect these costs to come down all of SQL then, or are you saying like we don't make incremental investments on top of this, and we kind of scale over these costs over time as the customer gets bigger.

Hemanth Munipalli: Yeah, I think, well, I think the way I mean a lot of this is a question of timelines and what we're talking about here is we look forward into sort of 2024 and the mid and the mid long term. We do expect to continue to be able to drive leverage in our marketing spent we think the word amount of facts that Matt talked about as well. And these bad investments will ultimately help us also drive down performance marketing class and continue to get leverage on it.

Hemanth Munipalli: It's a question of time horizons. But we look forward to 2024 in particular, we've got high convection that these investments were making now in 20 in the fourth quarter of this year will deliver returns for us next year. Understood. Okay, I appreciate you taking the questions. Thank you.

Operator: One moment for questions.

David Scharf: Our next question comes from Alex Markgraff with key bank. You may proceed. Okay, thanks for taking my questions. Maybe just not to overplay it, but just one more on the kind of marketing piece of that side of things and muted economics. You all talk a lot about guardrails, I think it's kind of helpful context. I'm just curious as you sit today and making some of these investments, kind of if you think about the higher end of those guardrails, just any sort of context to help us think about where you sit today versus what maybe you're comfortable with at the top end.

David Scharf: Or the, you know, far side of that guardrail. Yeah, maybe let me try to give you some color and context. Alex, thanks for the question. I think we've said, as you've said before, and including last quarter that an MTV cat ratio of six is a pretty attractive. The unit economics place to be in and we think we've got some room here to be able to make further investments, particularly as we've been talking about in terms of marketing and still have really robust and attractive unit economics when we look at this internally.

David Scharf: We also look at this from an incremental payback and cat perspective as well as look at sort of the NPV of these of these investments and we feel pretty comfortable by looking at and triangulating it on multiple places that the returns we expect to generate from this in the horizons we're looking at makes a lot of sense. And I would, I would say Alex, the only thing I'd add on that front is, you know, I feel very good about both the average and incremental tack on the marketing investments that we're making right now.

David Scharf: And I think what you see in the guide is we raised a density, but a guidance. Had we decided not to invest as much in some of the marketing investments in keyboard, which we can always choose to dial up or dial down then what you would see is dialing up or down our confidence when we eventually guide to 2024 growth. But because of the fact that we a wanted to raise guidance be we're in control of how much we're spending and growing and see that the marginal and average payback are very good right now.

David Scharf: I think that we're threading that needle to invest the right amount for the long term in q4 and my long term, I mean we'll get that the return from those investments in 2024. And we're being very intentional about dialing those those levers up and down to kind of balance growth and profitability not only in q4 but also in 2024 as we think about next year. Thank you. That's great. Thank you. So that I think probably makes the next question a bit easier, but just in terms of, you know, the implied EBITDA margin, and the fourth quarter, I think it's pretty clear a lot of that is kind of marketing investment or way to just curious him on anything on the transaction expense line to consider for the fourth quarter.

David Scharf: Yeah, no, look, I think broadly, I think the transaction expense line we've been really pleased with the progress we've made both in sort of driving down by using pay-in and pay-out costs, which are basically related to economics with our partners both on the pay-in inside and the disbursement side. And as well as, I think we've talked about the advances in terms of fraud management while keeping the friction with our customers low.

David Scharf: So we would expect that the trajectory on that will be consistent as we look forward to, you know, this quarter or our subsequent quarters into next year. I think what's important to point out is Q4 is hugely high. And I think as we look at that with the record number of customers, which generally add in a quarter like this, they could be cases where we might see some increased fraud levels which we plan for, but we are actively monitoring.

David Scharf: But that's the only I would say call out particularly with regard to Q4, but the trends are very favorable in terms of driving continued margin improvement. Great. Thank you both. Thank you. And as a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. One moment for questions.

Matthew Oppenheimer: Our next question goes from David Sharf with JMP Security. You may proceed.

Matthew Oppenheimer: Good afternoon. Thanks for squeezing me in here. I apologize if these have been asked, I've been jumping bouncing between three or four different calls. I am already assuming there have been about six questions about the fourth quarter marketing plan. So I'll pass on that. But Matt, you know, not sure if you covered this already, but is there any incremental commentary just on not just the competitive environment, but in particular, where the newer customers lately have been coming from?

Matthew Oppenheimer: And specifically, as we kind of reference the stepped up investment in digital from Western Union, for example, we have less visibility in the money. They grabbed out private, but is the profile of your new ads changing at all, meaning are they first time digital remitters? And you have a chance to kind of maintain the loyalty. Do you get a sense that they're folks that have used Western Union or other providers and the stickiness is still in question?

Matthew Oppenheimer: Yeah, thanks David, great, great questions and good to see you. I think that the headline on the competitive landscape is there have been no material changes in the in the last quarter. I think that the structural changes in the industry, meaning shift to digital, and I'd say that is coming from a wide range of customers, whether that's a, you know, scaled legacy player, whether that sub scale, legacy players, who have a difficulty building out a viable trusted, reliable digital solution, or whether that's other digital players that are maybe sub scale and not able to provide the reliable service we do.

Matthew Oppenheimer: We're seeing a shift from a wide range of competitors when you think about our new customer acquisition, and we think that we're uniquely positioned given our scale, given our operational excellence, and given our digital first approach. And I see that in our overall, you know, quarterly active user growth and the resilience of our existing customers coming back again and again, as well as new customers that are increasingly choosing us because of things like word of mouth and others that are recommending their service to their friends.

Matthew Oppenheimer: I got it. And maybe just as a follow-up on the marketing side, when you make in comment or provide an observation that you believe the LTV to CAC ratio is trending upward, can you provide a little more meat around the bones in terms of where is that incremental lifetime value coming from? Is it based on a sense that your average principal percent is increasing? Are you seeing something innate that tells you the average velocity or number of, you know, sends per year is increasing?

Matthew Oppenheimer: What actually takes up an LTV? Yeah, great question, David. Let me try to ask about that for you. First off, when we look at LTV just as a reminder, it's really sort of our cumulative transaction profit. We would expect to get from our customers and co-hubs. And there's two components of that that is giving us confidence that we are making completely improving our LTV. One is our interest transaction intensity. I think being also digital first and at scale, we're seeing increasing digital transactions and the identity of those transactions is increasing and that's across, across our active customer base.

Matthew Oppenheimer: So that intensity increased, coupled with our transaction margin, which has continued to improve for the reasons we've described previously around scale for paid and paid out cost and some other work that's been done on the front side, gives us a high conviction and just analytics around LTV on a good trajectory.

Matthew Oppenheimer: So very helpful. Thanks so much.

Tencent Wong: Thank you. One moment for questions.

Matthew Oppenheimer: Our next question comes from Tencent Wong with JP Morgan, you may proceed. Hi, thanks so much, good afternoon, everybody. I know you've covered a lot already.

Daniel Krebs: I just wanted to ask Matt on visibility. If you don't mind and if it's changed here in the local world and pricing, competitive actions, regulations, just curious if you feel like the visibility has changed in your mind. And Tencent, we talked about visibility talking about, you know, forward-looking kind of, yeah, what do you mean? Yeah, exactly, visibility into the financial outlook and the short-term as well as just the behavior of the consumer side.

Daniel Krebs: If anything, surprise you. I know you've covered a lot of that already, but just wanted to check on changes in visibility. Thank you. Thanks, Tencent. Yeah, good to see you. I think that one of the things that is unique about remittances and specifically remittly and how we both manage the business and who our customers are, the non-descriptionary nature of them sending money is a bit more predictability and resilience. We've seen that, you know, over the last decade of running the business, we've seen that in world bank studies in the past.

Daniel Krebs: There's a predictability, especially when you look at the business from a cohort view and a resilience, especially when you understand why funds are sent home, whether that's emergency medical expenses, natural disasters, sometimes when there's tragedy, there's actually a greater need for remittances. And, you know, we've seen that over quite a few cycles. So, you know, I would come back to our customers and gratitude for them and that being the case that we have more predictability and visibility to our business, but that's one of the reasons as we, you know, start thinking about talking about 24. We're excited about what's to come. Thank you. One moment for our next question. Our next question comes from Daniel Krebs with Wolf Research, you may proceed. Daniel Krebs, your line is now open.

Matthew Oppenheimer: And I would now like to turn the call back over to Matt Almondheimer for any closing remarks. Thanks, operator. And thanks everyone for the thoughtful questions.

Matthew Oppenheimer: As we always do, Remitly, I'd like to end the call by highlighting one of our amazing customers whose name is Alexis. And Alexis sends money from Australia to her family and the Philippines. And Alexis was one of the many new customers we added this year and reflects the increasing diversity of our corridor portfolio. And Alexis shared this app is awesome. Try it. It is fast and easy. I love it. We thank Alexis for her loyalty to Remitly and appreciate her recommendation for others to try our service.

Matthew Oppenheimer: Thanks everybody for joining us and we appreciate your support. We're excited about the opportunities ahead of us as we in the year and as we look forward to sharing more of our progress in 2024. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Goodbye. Bye.