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.
Is now the time to buy Remitly? Find out in our full research report.
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.
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.
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.
Ahead of the earnings results, analysts covering the company were projecting sales to grow 27.4% over the next 12 months.
The pandemic fundamentally changed several consumer habits. There is a founder-led company that is massively benefiting from this shift. The business has grown astonishingly fast, with 40%+ free cash flow margins. Its fundamentals are undoubtedly best-in-class. Still, the total addressable market is so big that the company has room to grow many times in size. See it here.
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.
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.
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The author has no position in any of the stocks mentioned in this report.