Remitly Global Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Schmidt - Citi - Analyst : Maybe just dig into the third quarter performance. Obviously, great, great results here. Could you just talk a little bit about just whether there was anything else other than currency that might have influenced results or caused a onetime effect? It seems like a very, very robust result. And the fourth quarter, it seems like you're obviously not assuming that momentum continues, maybe a prudent starting assumption. But if you could dig in there, that would be helpful.

Question: Andrew Bauch - Wells Fargo - Analyst : Maybe if you could just give us some of the building blocks on that 2025 guide. It's really helpful to have the low to mid-20%s, but some of the fundamental assumptions that are going in there. I know you mentioned there were certain tailwinds in select corridors that are expected to ease. So maybe if you can give a little bit more detail there.

Question: Ramsey El-Assal - Barclays - Analyst : Super impressive results this quarter. I was wondering if you could comment on operating leverage. And I guess, specifically in the quarter and specifically marketing came in better than our expectations, probably better than the street as well. What marketing efficiencies are you seeing? And I guess, can you comment on whether you expect the sort of favorable trends to continue next quarter and beyond?

Question: Will Nance - Goldman Sachs - Analyst : Great to see the strong results and momentum in the business today. I wanted to ask a couple of -- one of your competitors mentioned a couple of macro impacts in the month of October, particularly it sounded like maybe seeing some of these FX-related tailwinds in the business subside in October in the U.S.-Mexico corridor as weather -- as well as some disruptions in kind of Central America. So from your commentary, it kind of sounded like you guys are not seeing that, but just wanted to check and see if you guys have observed any notable patterns there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 9:00PM, RELY.OQ - Q3 2024 Remitly Global Inc Earnings Call

Question: Will Nance - Goldman Sachs - Analyst : Got it. That's great to hear. And then just I'll try another one on marketing as we look ahead into the fourth quarter. I think last year, we saw a pretty substantial step-up in marketing from the prior run rate in the fourth quarter. And plus or minus, it sort of bounced around in this $70 million range since then. I mean, is that the right cadence where you kind of strike a new level for marketing in the fourth quarter for the following year? And just any thoughts on kind of how to think about the sequential step-up there?

Question: Tien-Tsin Huang - JPMorgan - Analyst : Great results here. On the fourth quarter outlook, I know you mentioned seasonal considerations and the take rate sequential decline due to mix. But just thinking about why this fourth quarter from a seasonal pattern perspective would be different than the past because it feels like it's pretty conservative in terms of the outlook. I know third quarter was quite strong. Perhaps there was some pull forward with the strong dollar, but just trying to better understand the thinking on 4Q.

Question: David Scharf - JMP Securities - Analyst : Most have been answered, but one, just housekeeping, maybe I missed this. Have you quantified what the year-to-date FX impact has been on revenue growth as you define the FX tailwind? Just to give us some context for what's being conservatively left out of next year.

Question: Rufus Hone - BMO capital markets - Analyst : Great to see the GAAP profitability this quarter. I wanted to get your thoughts on the longer-term EBITDA margin. Obviously a good uptick in margins this quarter, but really appreciate your comments around the improving marketing efficiency and the organic word-of-mouth traction. But how are you thinking about the pace of EBITDA margin expansion in 2025 and beyond? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 9:00PM, RELY.OQ - Q3 2024 Remitly Global Inc Earnings Call

Question: Chris Kennedy - William Blair - Analyst : It's clear you guys have a lot of growth levers. Can you just talk about how you allocate capital between your growing established markets, your emerging markets and then entering new geographies?

Question: Darrin Peller - Wolfe Research - Analyst : Nice quarter. And it looks to us a little bit, and I'm curious if you can comment on this, but like the magnitude of the beat in the third quarter was somewhat giving you guys some room, because I know the previous view was EBITDA would be sort of spread out evenly over the first -- the second half quarters. And now you had a nice beat in Q3 and yet from a Q4 standpoint, it looks like EBITDA obviously steps down from a growth rate standpoint quite a bit. And so I'm just kind of curious if you're just spending -- you're utilizing the beat to spend more on marketing to set up well for 2025, which is great if that's the case, just as an investment in the business. And maybe just kind of a quick follow-up would be on the opportunity around gross -- I'll just ask it all at once -- opportunity around gross margins, especially as we look more -- if there's just more room and white space on the current corridors for bank integrations and some of the items you've done so far, setting aside fraud loss variability, I guess, also. But if you could just comment on both of those, that would be great.

Question: Alex Markgraff - KeyBanc Capital Markets - Analyst : Vikas, one for you, on the metric that you had mentioned, the marketing expense per quarterly active. Just sort of curious from your seats why that's the right metric to think about with, I guess, the underlying question, just looking to better understand how much of that marketing expense is going towards new customers versus existing customer retention?

Question: Gus Gala - Monness, Crespi, Hardt & Company - Analyst : I had one -- a couple. So as the base diversifies, the core is now 50% non-India, Philippines, Mexico. Are you seeing performance marketing efficiencies from targeting those geos? And then the second part is, how do you think of the, I don't know, the RLTE growth and contribution margin of these newer corridors versus the core corridors, if you will?

Question: Zachary Gun - FT partners - Analyst : So great to hear you talk about RLTE. And I know you discussed an RLTE dollars that going up. But I think across the industry, there's a view that over the long term that the margin has to come down just due to pricing. But given all the drivers you discussed of being able to drive efficiency and transaction expense, can you just help us understand long term, how we should think about the direction of that margin? And then just have a follow-up after that.