Remitly Global Inc Post-Earnings Webinar Hosted by Goldman Sachs Transcript

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

Question: Will Nance - Goldman Sachs Group Inc - Analyst : So you guys had, I think one of the biggest product unveilings, that I can recall since the IPO. Matt, I think you kind of deemed it a bit of an inflection point in the trajectory of the company in terms of the amount of product rolling out soon. There's an upcoming product demo, where we will hear more. But maybe just high level, can you level set for, what are some of the recent developments on the product side, that you guys were excited to share with us on the earnest call? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Great. So there's a lot there. Let's -- you started on Remitly business, so maybe that's a good place to start. You guys have mostly focused on the consumer side of the cross-border, since the company's founding. You've been talking the last couple of quarters about enhancements to the KYC process, and some changes that you've made to be able to accommodate, microbusinesses on the platform. Can you talk a little bit more about those product enhancements, and maybe what it's taken to kind of broaden out the aperture of the platform?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Yeah, and I guess what else can you tell us about some of those customer profiles? I think the people in the US, it's a very large market and very domestic centric. I don't think there's not always a great understanding or an intuitive understanding for what these businesses, what these cross-border needs look like. So anything that's really surprised you are the types of businesses, that you thought I didn't know that was a thing and now they are, and now we're helping them. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : That's great. Maybe that's a good segue to the high value senders. This is something you've been talking about for a bit. I think starting, as long ago it was about a year ago, you started talking about Remitly for seafarers, which, I think you mentioned is also a very high dollar amount to send. Where are we on the rollout and what can you tell us about the transaction economics here? I think related to that, I'd also be curious to hear your thoughts on just what this does to your corridor mix because, my sense is that may look a little bit different, than your traditional remittance corridors.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : And I know one thing that you know always comes with higher risk limits on the transactions is the potential for higher fraud, that's remained relatively well contained. But anything you can share on sort of the results from some of the sophistication of the of the new risk limits, that you've put on in terms of managing higher levels of send with lower levels of fraud, etc.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Makes sense. And then, just on this idea of kind of more send to send type markets, US to UK to kind to Europe, etc. Can you just talk about like the differences in sort of operationally what it's like to operate in those corridors. How, FX spreads, on ramp off-ramp costs, what is pricing and unit economics look like in some of these corridors relative to some of your more traditional corridors?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Interesting, even more profitable segment. It's an interesting characterization. I want to shift to Remitly One and knowing that you have an upcoming product event. I'm curious about anything that you can tell us about what this product might look like. I was interpreting from the comments that this could be a subscription oriented product. Maybe if you could talk a little bit about the benefits of more of a membership model and what that might look like and, is this a platform for you to build a deeper relationship over time with customers, than what you've historically had.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Oh, that sounds great. We will tune in. I want to talk about each of those products, and I guess starting with Remitly Flex. It sounds like there is a bit of a credit component to this, so I'd be curious to hear about your thoughts on that, the underwriting. How you're thinking about the rollout and then big picture. What are the pricing dynamics and maybe for anyone who who didn't tune into the earnings call, remind us about kind of the use case and the value pro of this product. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : That's great. All right, and then I wanted to hit on Remitly Wallet as well. This is one that I'm personally excited about, because I think we have seen the journey, the Remitly has been on at the time of the IPO with the passbook product over the last year or two with the Remitly circles product. And I'm curious if you could speak to the journey you've been on to get to this point of allowing stored balance, functionality on the platform. How you're thinking about the rollout to the broader app, and anything you could tell us about just the implementation, and kind of what was the lift like that it took to get here. And what's kind of it left in front of you to get this fully deployed.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : One thing that I know, we chatted a bit about after the earnings call. When I think about a wallet and stored balance, one of the things that comes to my mind are card products, things like debit cards, and so curious if that's on the roadmap. If that's already baked in, and just how you're thinking about the potential monetization opportunities, that come from having stored balances on the platform. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Sounds good, it's a good teaser. Okay, I had one for the cost here just because there were so many products that were announced. The guidance was obviously you beat the quarter, you raised the guidance was very strong. If you could just talk about the -- how you think about the revenue contribution from some of these new products. And maybe clarify what sort of baked into the guidance that you've provided to 2025, and how you think about timing of actually seeing a bigger contribution from some of these things.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Got it. That's very clear. Okay, I want to transition this conversation a bit towards stablecoins and talk about some of these dynamics, specifically as they relate to Remitly but also, you guys are experts at cross-border and I know there's a lot of people trying to understand, just how stablecoins fit into that ecosystem. Look, the company was founded 14 years ago. You've been diligently building out the capabilities that you have today to reach thousands of corridors. I think most people know cross-border payments are very complex, but they don't really understand how they work. And what it takes to actually move money from one country to another. So I thought it might be a good idea to just level set here, how a company like Remitly actually conducts cross-border payments today. And how you go about building a platform like the one you have today from scratch.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Super helpful. Alright, so I want to continue to sort of set the stage here and just kind of level set on some of the inherent costs in cross-border, and I think one of the things that comes up a lot in this stablecoin conversation is the lower cost of sending money. The fact that it's kind of limited to the marginal cost of sending money on the blockchain, which can kind of asymptote to zero over time and so. One of the things that I wanted to just discuss is, when we see the numbers and the Remitly model, we see that transaction costs as a percentage of volume runs at about 70 basis points and you know my understanding is that varies considerably based on corridor, rails, etc. You just touched on some of the different variables. So maybe you could talk a little bit about what the marginal costs are in cross-border, and if there's any way to delineate that between, on ramp, off ramp, the currency conversion, settlement, swift and correspondent banking, what do you spend the most time thinking about the cost opportunity to minimize in the business?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : That's super helpful. Okay. And then I guess maybe we can bring stablecoins into this conversation, because it dovetails nicely. When you think about a stablecoin transaction, what it can do for your network efficiency. What part of the transaction do you think it's mostly useful for in addressing costs and maybe where is it not applicable?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Yeah.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : So that settlement thing has come up a lot, I think, and I don't know if Turkey is a good example, if there's another market that comes to mind where either the volatility of the currency or the capital controls into that market or just normal banking hours makes it a pain for you guys to manage the settlement and the working capital needs of the business. And so, again, if Turkey is not the right example, I'm sure there is one that you do have, but like, can you make it real for us in terms of where you see the biggest friction on your own rails, around settlement and, where stablecoins might actually, is it more than nine to five banking hours thing, or is it currency liquidity and capital controls that you're fighting more often? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Okay, so then I guess the next was need, right? That was a great, that was great on the structural cost. One of the things that you mentioned on the earnings call, which I thought was interesting was the Dominican Republic, where the delivery method involves someone physically showing up at the door to deliver cash. And I'm sure that's not something that sits at the efficient frontier of payments, but that's a market convention thing. It's not a Remitly thing, there's clearly a reason why the customers want that. So how do you think about stablecoins in that example, clearly it's helpful what needs to happen, and what are the benefits to the customer, and also what are the benefits to Remitly in that scenario.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Yeah. I definitely want to come, that's actually my next question, but I guess before we move on to that, I just, there's one thing that you didn't mention, which is just stable coins being an accelerant to digitization trends more broadly. I know this is something you've talked about. I think actually in the Philippines over the last couple of years and the adoption of mobile wallets. So to go back to, the number one cost in this market is that off-ramp into the local economy. Are there areas like the Philippines, like the Dominican Republic, potentially some, maybe some of these markets where you more demand for stable currencies, where your structural cost to the transaction is still very high. And if we do see the market adopt something like the stablecoin, what could that do to your cost structure and to pricing trends more broadly in the industry.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Got it. Okay, let's talk about regulation, very important. We, obviously the passing of the GENIUS Act in the US was a big catalyst for the stablecoin conversation over the summer. One of the things that almost every company in the cross-border space, Remitly included has spoken about is just the complexity of managing the licensing and the KYC and regulatory requirements to move money across border. Every send market, every receive market, every transaction and every customer needs to be kind of managed responsibly. So what did it take for Remitly to obtain the licensing to operate and when you think about stablecoins, like what do you see as some of the maybe the regulatory hurdles that need to be cleared to implement them? Yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Very good. That sounds exciting. We've got about 10 minutes left here. I have a couple more that I wanted to cover. I want to talk about fraud. I think that's one thing that gets missed a lot in this conversation. It's a huge cost that you need to manage. One of the -- I guess the scariest things that everyone in the payment space talks about is some fraud vector and not catching it soon enough. A recent example, I think Remitly fraud costs were elevated this past quarter by about 3 basis points off of 13, due to an isolated fraud incident. So I guess maybe walk us through that, what, how did you detect that and manage fraud? And how do you think about special considerations for managing fraud risk with stablecoins?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : No, I mean 13 basis points is a very low level on an ongoing basis, and it's kind of been range bound for a very long time, so I know it takes a lot to get to that level and maintain it. I want to talk a little about, we talked a lot about where the industry is headed, the opportunities longer term. To bring this conversation back more to the nearer term, as we end the call, I wanted to go back to the Remitly Wallet and some of the specific stablecoins features, that you are thinking about rolling out in the near term. What do you envision for customers to be able to use stablecoins on the Remitly Wallet and what is sort of the roadmap or timeline for other use cases for stablecoins, both customer facing and internally?

Question: Will Nance - Goldman Sachs Group Inc - Analyst : Awesome. Matt, thank you very much for spending the time today, Matt and Vikas, it's been great. I think, I learned a lot. I know other people did as well. It's a fascinating space, and it's one that I know there's a lot of demand for people to learn about, and I think you've given a lot of people. A lot of stuff to think about. So thank you. I hope you guys have a great summer. Thanks for doing this and we're looking forward to seeing you at the Goldman Sachs conference in San Francisco in a few weeks as well as at the product event on September 9.