Remitly Global, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. Remitly provides digital cross-border remittances and earned substantially all revenue from transaction fees and foreign-exchange spreads.
Financial and operating performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $653.6 million | $458.6 million |
| Transaction expenses | $258.8 million; 40% of revenue | $191.6 million; 42% of revenue |
| Gross profit, calculated as revenue less transaction expenses | $394.7 million; approximately 60% margin | $267.0 million; approximately 58% margin |
| Loss from operations | $(121.0) million | $(39.7) million |
| Net loss | $(114.0) million | $(38.8) million |
| Adjusted EBITDA, non-GAAP | $(13.6) million | $(10.5) million |
| Net cash used in operating activities | $(105.1) million | $(18.4) million |
| Cash and cash equivalents at year-end | $300.6 million | $403.3 million |
| Revolving credit facility | $250.0 million commitment; no borrowings; $227.7 million unused capacity | No borrowings |
At December 31, 2022, total assets were $696.0 million, total liabilities $215.9 million, and stockholders’ equity $480.1 million. Remitly reported no outstanding borrowings under its revolving facility and was in compliance with its financial covenants. Management said cash, cash equivalents, and available facility capacity were expected to meet working-capital needs for at least 12 months.
Business trends and changes versus the prior year
- Revenue grew 43% and send volume rose 40% to $28.6 billion. Fourth-quarter active customers increased 48% year over year to 4.2 million.
- Transaction expenses declined as a share of revenue, which management attributed primarily to improved partner economics at greater scale. Customer support and marketing each remained at 10% and 26% of revenue, respectively.
- Technology and development expense rose 116% to $138.7 million, while general and administrative expense rose 85% to $131.3 million. Stock-based compensation was $95.3 million, compared with $17.0 million in 2021.
- Net loss widened substantially; Adjusted EBITDA also worsened by $3.1 million, remaining negative at approximately 2% of revenue.
- Operating cash use increased, with management citing growth in customer-related balances and year-end timing: December 31, 2022 fell on a Saturday during a holiday funding weekend. Customer funds receivable increased by $126.9 million during the year.
- Mexico, India, and the Philippines accounted for approximately 65% of revenue, down from 70% in 2021. Revenue from the United States was $472.8 million; Canada, $80.1 million; and the rest of the world, $100.7 million.
Outlook, risks, and unusual items
- Management did not provide numerical revenue or earnings guidance in the supplied filing text. It expects continued investment in technology, product development, geographic expansion, and customer acquisition; these investments may pressure near-term profitability.
- On January 5, 2023, Remitly acquired Rewire for approximately $77.0 million in cash and equity consideration. About $12.0 million was held back for potential indemnity claims. Purchase accounting was preliminary and incomplete at the filing date.
- Transaction losses were $41.9 million in 2022, versus $29.7 million in 2021. The company warned that losses of similar or greater magnitude could recur.
- Key risks include extensive and changing money-transfer, AML, sanctions, and consumer-protection regulation; fraud and transaction losses; cyber and data-security incidents; reliance on payment and disbursement partners; foreign-exchange movements; and concentration in major receive markets.
- Remitly recorded a $4.4 million out-of-period stock-compensation adjustment in the second quarter of 2022. Management said it was not material to the 2022 annual results or previously issued annual statements, although its impact on the second quarter was considered material. Three previously identified material weaknesses in internal controls were reported as remediated by year-end; management and the auditor concluded internal control over financial reporting was effective as of December 31, 2022.
- Indirect-tax liabilities accrued were approximately $6.0 million at year-end, up from $3.8 million. Management reported no litigation or regulatory proceedings it believed material and no material probable loss contingency at year-end.
- The company remains unprofitable, has accumulated losses, and does not intend to pay dividends in the foreseeable future. Adjusted EBITDA is a non-GAAP measure and excludes, among other items, recurring stock-based compensation.
Important facts for investors to verify
- Whether customer growth and send-volume expansion can translate into improving GAAP operating results, and how recurring stock-based compensation affects the path to profitability.
- Whether transaction-loss rates and customer acquisition economics remain sustainable as volume grows.
- Cash conversion and working-capital needs, particularly customer receivables, disbursement prefunding, holiday timing, and regulatory liquidity requirements.
- Rewire’s final purchase-price allocation, integration costs, and realized revenue or cost synergies.
- Exposure to Mexico, India, and the Philippines, foreign-exchange movements, partner concentration, and evolving regulatory requirements.
- The terms, covenant headroom, and practical availability of the revolving facility, as well as the distinction between corporate cash and funds held to support customer transactions.