Remitly's (NASDAQ:RELY) Q3 Sales Top Estimates But Stock Drops 16.6%

Adam Hejl /
2023/11/01 4:25 pm EDT

Online money transfer platform Remitly (NASDAQ:RELY) reported Q3 FY2023 results topping analysts' expectations, with revenue up 42.8% year on year to $241.6 million. Full year guidance was at $939 million, also exceeding expectations. Turning to EPS, Remitly made a GAAP loss of $0.20 per share, down from its loss of $0.20 per share in the same quarter last year.

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Remitly (RELY) Q3 FY2023 Highlights:

  • Revenue: $241.6 million vs analyst estimates of $239.2 million (1.02% beat)
  • EPS: -$0.20 vs analyst expectations of -$0.16 (25.5% miss)
  • The company lifted its revenue guidance for the full year from $920 million to $939 million at the midpoint, a 2.07% increase
  • Free Cash Flow of $29.7 million is up from -$52.6 million in the previous quarter
  • Gross Margin (GAAP): 55.7%, up from 48% in the same quarter last year
  • Active Customers: 5.4 million, up 1.6 million year on year

“We are pleased with our third quarter results which reflect the continued strong execution by our global teams and the resilience and trust our customers have placed in us,” said Matt Oppenheimer, co-founder and Chief Executive Officer, Remitly.

With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ:RELY) is an online platform that enables consumers to safely and quickly send money globally.

Consumer Internet

The ways people shop, transport, communicate, learn and play are undergoing a tremendous, technology-enabled change. Consumer internet companies are playing a key role in lives being transformed, simplified and made more accessible.

Sales Growth

Remitly's revenue growth over the last three years has been exceptional, averaging 57.9% annually. This quarter, Remitly beat analysts' estimates and reported excellent 42.8% year-on-year revenue growth.

Remitly Total Revenue

Ahead of the earnings results, analysts covering the company were projecting sales to grow 27.4% over the next 12 months.

Our recent pick has been a big winner, and the stock is up more than 2,000% since the IPO a decade ago. If you didn’t buy then, you have another chance today. The business is much less risky now than it was in the years after going public. The company is a clear market leader in a huge, growing $200 billion market. Its $7 billion of revenue only scratches the surface. Its products are mission critical. Virtually no customers ever left the company. You can find it on our platform for free.

Usage Growth

Over the last two years, Remitly's active buyers, a key performance metric for the company, grew 47.7% annually to 5.4 million. This is among the fastest growth rates of any consumer internet company, indicating that users are excited about its offerings.

Remitly Active Customers

In Q3, Remitly added 1.6 million active buyers, translating into 42.1% year-on-year growth.

Key Takeaways from Remitly's Q3 Results

Although Remitly, which has a market capitalization of $4.88 billion, has been burning cash over the last 12 months, its more than $223.3 million in cash on hand gives it the flexibility to continue prioritizing growth over profitability.

We were very impressed by Remitly's robust user growth this quarter. We were also excited it produced strong revenue growth. Overall, we think this was a good quarter. The market might have been expecting more though, however, and the stock is down 16.6% after reporting, trading at $23 per share.

Remitly may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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The author has no position in any of the stocks mentioned in this report.