RELY Q2 2025: RemitlyOne, stablecoin rollout lifts revenue, margins
- Innovative Product Suite Expansion: The management highlighted the roll‐out of new offerings—including Remitly Business, Remitly One membership with Wallet and Flex, and stablecoin capabilities—which are designed to drive increased customer engagement and tap into new segments such as small businesses and cross‐border users.
- Strong Unit Economics and Retention: Executives emphasized that higher average transaction sizes and improved retention, particularly among high-amount senders and micro-business customers, support strong unit economics and provide a basis for scalable revenue growth.
- Digital and Stablecoin Integration for Future Growth: The Q&A underscored that stablecoin integration—with comparable transaction economics to traditional channels—coupled with advanced digital and AI technologies offers a compelling avenue to modernize cross-border payments and enhance overall platform efficiency.
- High execution risk on new product rollouts: The Q&A highlighted that Remitly is aggressively investing in new offerings (e.g., Remitly One, Wallet, Flex, and stablecoin features) with increased marketing spending to support these initiatives, which could pressure margins if customer adoption does not meet expectations.
- Exposure to external cost pressures: Discussions in the Q&A pointed to potential margin compression from external factors such as partner banks introducing fees for API access and the upcoming 1% remittance tax change, which could adversely impact operating costs.
- Reliance on evolving customer behavior amid competitive dynamics: Analysts questioned the unit economics and sustainable demand for stablecoin and membership products, suggesting that if market enthusiasm or customer uptake slows, this reliance on new product adoption may hinder revenue growth and profitability.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | $383M–$385M, 25–26% growth | $411M–$413M, 22–23% growth | raised |
Adjusted EBITDA | Q3 2025 | $45M–$47M, 12% margin | $53M–$55M, 13% margin | raised |
Transaction Expense | Q3 2025 | Expected to be in line with full-year 2024 percentage of revenue | Expected to be in line with full-year 2024 levels | no change |
Marketing | Q3 2025 | Planned increase in marketing investments with marketing per QAU expected to decline modestly | Marketing investments will increase with marketing per QAU expected to grow by mid-single digits | raised |
Revenue | FY 2025 | $1.574B–$1.587B, 25–26% growth | $1.610B–$1.620B, 27–28% growth | raised |
Adjusted EBITDA | FY 2025 | $195M–$210M, 12–13% margin | $225M–$230M, 14% margin | raised |
GAAP Net Income | FY 2025 | Positive GAAP net income expected | Modest positive GAAP net income | no change |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Customer Engagement and Retention Growth | Prior calls (Q1 2025, Q4 2024, Q3 2024) emphasized increased active customer numbers, improved transaction frequencies, and strong retention through friction‐reducing innovations and AI‐assisted enhancements | Q2 2025 featured 8.5 million quarterly active customers, a 24% YoY boost, record 45% growth for high‐amount senders, and early customer retention signals from the new Remitly Business product | Consistent focus with improved metrics and deeper engagement in high‑value segments |
Enhanced Marketing Efficiency and Organic Acquisition | Earlier periods (Q1 2025, Q4 2024, Q3 2024) highlighted lower marketing spend per customer, effective use of organic channels, and data‐driven campaigns | Q2 2025 showed improved marketing ROI with a decline in spend per active customer and a new strategic emphasis on high‑impact sports partnerships that strengthen organic acquisition | Continued efficiency improvements with the addition of strategic partnership channels |
Margin Pressure, Profitability Risks, and Cost Management | Across Q1 2025, Q4 2024, and Q3 2024, the discussions focused on operating efficiency, improved transaction expense percentages, and cost discipline through technology and AI tools | Q2 2025 reported strong profitability with a 16% adjusted EBITDA margin, further cost improvements in transaction and support expenses, and acknowledgment of emerging risks such as potential partner bank fees | Sustained cost management and margin expansion initiatives while cautiously monitoring emerging risks |
Foreign Exchange Volatility and Macroeconomic/Regulatory Uncertainties | Q1 2025, Q4 2024, and Q3 2024 discussed FX risks with robust treasury management, balanced FX headwinds and tailwinds, and diversification to mitigate macro risks | Q2 2025 did not emphasize FX volatility but highlighted a new regulatory development—the “One Big Beautiful Bill” that favors digital transactions—suggesting a regulatory tailwind over FX concerns | Shift from balanced FX commentary to a focus on favorable regulatory changes, improving sentiment |
New Product Suite Expansion with Stablecoin Integration | In Q1 2025, only Remitly Circle was mentioned as a sandbox for innovation, with no stablecoin integration discussed in Q3 or Q4 2024 | Q2 2025 unveiled a broader new product suite with the formal launch of Remitly Business, the upcoming Remitly One (with Wallet and Flex features), and stablecoin integration via Circle to modernize cross-border payments | Emergence of innovative, diversified digital products that open new revenue streams and expand market reach |
Digital Transformation and AI/ML Integration | Q1 2025, Q3 2024, and Q4 2024 highlighted use of AI for risk management, fraud detection, and enhanced customer support; virtual assistants and machine learning drove operational efficiencies | Q2 2025 continued the digital transformation journey with agentic AI across conversational interfaces, enhanced AI-driven risk models, and further reductions in support friction and operational costs | Continued deepening and broadening of AI integration, reinforcing digital capabilities and operational excellence |
Direct Partner Integrations to Accelerate Transactions | Previous calls in Q1 2025, Q3 2024, and Q4 2024 underscored strategic direct integrations with partners (e.g., M-PESA, MTN, Airtel, Nagad) to drive faster transactions and lower costs | Q2 2025 reiterated the role of direct integrations in reducing friction, raising transaction limits, and boosting YoY send volumes from high‑amount senders | Consistent momentum with further operational benefits, underscoring their strategic importance |
Execution Risks in Rolling Out New Products and Technologies | Earlier periods (Q1 2025 and Q4 2024) referenced the Remitly Circle sandbox and emphasized disciplined innovation, although risks were only touched on indirectly | Q2 2025 did not explicitly mention execution risks and instead conveyed confidence in the integration and rollout of new products and technologies | Reduced emphasis on execution risks as confidence grows in the company’s ability to scale new initiatives |
Expansion into New Segments (Micro-businesses and Cross-border Users) | Q1 2025, Q3 2024, and Q4 2024 detailed efforts to serve micro-businesses, seafarers, high-dollar senders, and other cross-border users, with adjustments to KYC/KYB and examples of customer use cases | Q2 2025 showcased the formal launch of Remitly Business targeting micro-businesses and freelancers, along with initiatives to capture high‑amount sending, expanding the TAM from $2 trillion to over $22 trillion | Strengthened market expansion with a broader addressable market and deeper focus on high‑value segments |
Shift from Traditional Remittance Models to Innovative Digital Solutions | Q1 2025, Q3 2024, and Q4 2024 focused on the transition from cash-based models by emphasizing digital channels, improved customer experiences via WhatsApp integrations, and lower operational costs | Q2 2025 highlighted the impact of regulatory change (tax on cash remittances), enhanced digital innovations including agentic AI and stablecoin capabilities, reinforcing the shift away from traditional models | Consistent digital shift, now further bolstered by favorable regulatory dynamics and advanced technology integrations |
Disciplined Capital Allocation and Margin Expansion Potential | Q1 2025 noted profitability improvements and cost efficiencies, while Q3 2024 and Q4 2024 detailed strategic capital management including share repurchase philosophies and tight cost controls | Q2 2025 emphasized a new $200 million share repurchase program, an upsized $550 million credit facility, and robust margin expansion through operational efficiencies and strategic high-value investments | Ongoing commitment to disciplined capital allocation with enhanced measures to expand margins and create long‑term shareholder value |
-
Product Rollout
Q: When will new products launch and impact profit?
A: Management highlighted that Remitly Business is already live and that RemitlyOne—including wallet and Flex components—will launch in September. They expect these rollouts, along with stablecoin initiatives, to add revenue and profit without major shifts in marketing spending. -
Stablecoin Economics
Q: Do stablecoin transactions change revenue models?
A: Management expects the revenue model for stablecoin transactions to remain similar to that for fiat, with comparable margins even when partnering with firms like Bridge, ensuring stable unit economics. -
Wallet Profile
Q: Who is the target customer for the wallet?
A: The wallet is aimed at the existing 8,500,000 active users who increasingly require multi-currency management, especially when relocating, thus enhancing cross-sell opportunities. -
Wallet Usage & Float
Q: How will customers use their wallet balances?
A: The wallet will integrate into the RemitlyOne membership, offering rewards like cash credits and interest-like benefits, which may generate additional float opportunities for the company. -
Business Market Strategy
Q: How does Remitly Business stand out against competitors?
A: The business product targets SMBs and freelancers with larger transaction sizes, emphasizing reliability, speed, and cost efficiency through a streamlined digital experience. -
Marketing & CAC
Q: Will new products affect CAC and marketing spend?
A: While a modest increase in top‐of‐funnel spending is expected to support innovations, the core business continues to drive efficiencies with a 6x LTV and payback under 12 months. -
Stablecoin Demand
Q: Are customers showing interest in stablecoin options?
A: Management noted emerging demand as customers, particularly in inflationary economies, seek the security of less volatile currencies—supporting the rationale behind the stablecoin offerings. -
Stablecoin Disbursement
Q: How do stablecoin disbursement costs compare?
A: The economics for stablecoin disbursements are expected to be comparable to traditional disbursement methods, with additional upside potential via the Remitly Wallet’s capability to generate net interest income.
Research analysts covering Remitly Global.