RELY

Business Context and Reporting Period

Company: Remitly Global, Inc. (RELY)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: Remitly operates a global money movement platform serving over 175 countries. The company is transitioning from a pure remittance provider to a diversified cross-border financial services provider, leveraging a network of direct integrations to serve consumers and businesses.

Key Financial Metrics

Note: Net income for Q2 2026 includes a significant non-cash tax benefit of $140.6 million due to the release of the U.S. valuation allowance.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 20% year-over-year (YoY) in Q2 and 23% for the six-month period, driven by a 20% increase in active customers (10.2 million) and a 27% increase in send volume ($23.5 billion).
• Profitability Surge: Net income jumped 3,050% YoY in Q2. This is primarily attributable to the release of the full U.S. valuation allowance against deferred tax assets, recognized as a discrete tax benefit of $140.6 million.
• Expense Management: Transaction expenses as a percentage of revenue decreased to 33% (Q2 2026) from 35% (Q2 2025). Technology and development expenses decreased 4% YoY in Q2 due to personnel cost reductions, partially offset by increased cloud service costs.
• Balance Sheet: The company repaid all outstanding borrowings on its $550 million revolving credit facility, ending the period with zero debt and $474.7 million in unused borrowing capacity.
• Share Repurchases: The company repurchased 3.9 million shares for $65.6 million during the first six months of 2026 under its $200 million program.

Guidance, Outlook, and Risks

• Management Commentary: Management highlights strong retention, efficiency gains from AI-driven marketing, and a shift toward high-amount senders and business accounts. The company expects to continue leveraging its network to expand corridors and product offerings.
• Regulatory Environment: The filing notes the "One Big Beautiful Bill Act" (OBBBA) passed in July 2025, which imposes a tax on outbound non-digital remittances. Management currently does not expect this to have a material impact on their digital-first business but is monitoring the situation.
• Risks: Key risks include foreign currency exchange rate fluctuations, geopolitical instability affecting migration patterns, regulatory changes in key corridors, and the ability to maintain fraud loss rates within guardrails.
• Restructuring: The company incurred $15.8 million in restructuring costs for the six months ended June 30, 2026, related to severance and lease exits in Israel and Ireland, expected to be completed by year-end 2026.

Investor Verification Checklist

• Tax Benefit Sustainability: Verify the sustainability of the $140.6 million tax benefit; this was a one-time release of a valuation allowance and will not recur in future periods.
• Adjusted EBITDA Reconciliation: Review the reconciliation of Net Income to Adjusted EBITDA to understand the impact of non-cash items like stock-based compensation ($62.0 million for 6M 2026) and restructuring costs.
• Customer Acquisition Costs (CAC): Monitor marketing expenses ($190.8 million for 6M 2026) relative to new customer growth to ensure unit economics remain efficient as competition intensifies.
• Regulatory Impact: Assess the potential long-term impact of the OBBBA tax on outbound remittances and any future regulatory shifts in key corridors (India, Mexico, Philippines).
• Share Repurchase Runway: Confirm the remaining $110.5 million available under the share repurchase program and management's intent to utilize it given the current cash position.