Remitly (RELY)

Online money transfer platform Remitly (NASDAQ:RELY) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 24.7% year on year to $419.5 million. On the other hand, next quarter’s revenue guidance of $427 million was less impressive, coming in 0.8% below analysts’ estimates. Its GAAP profit of $0.04 per share was $0.01 above analysts’ consensus estimates.

Company Overview

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.

Financial technology companies benefit from the increasing consumer demand for digital payments, banking, and finance. Tailwinds fueling this trend include e-commerce along with improvements in blockchain infrastructure and AI-driven credit underwriting, which make access to money faster and cheaper. Despite regulatory scrutiny and resistance from traditional financial institutions, fintechs are poised for long-term growth as they disrupt legacy systems by expanding financial services to underserved population segments.

Competitors offering online legal or document services include Western Union (NYSE:WU), Moneygram (NASDAQ:MGI), and private company WorldRemit.

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Remitly grew its sales at an incredible 37.2% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Remitly reported robust year-on-year revenue growth of 24.7%, and its $419.5 million of revenue topped Wall Street estimates by 1.4%. Company management is currently guiding for a 21.3% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 19.8% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and suggests the market sees success for its products and services.

Customer Growth

As a fintech company, Remitly generates revenue growth by increasing both the number of users on its platform and the number of transactions they execute.

Over the last two years, Remitly’s active customers, a key performance metric for the company, increased by 32% annually to 8.9 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

In Q3, Remitly added 1.59 million active customers, leading to 21.8% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating customer growth just yet.

Revenue Per Customer

Average revenue per customer (ARPC) is a critical metric to track because it measures how much the company earns in fees from each user. ARPC also gives us unique insights into the average transaction size on Remitly’s platform and the company’s take rate, or "cut", on each transaction.

Remitly’s ARPC growth has been subpar over the last two years, averaging 1.2%. This isn’t great, but the increase in active customers is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Remitly tries boosting ARPC by taking a more aggressive approach to monetization, it’s unclear whether customers can continue growing at the current pace.

This quarter, Remitly’s ARPC clocked in at $47.13. It grew by 2.4% year on year, slower than its customer growth.

A company’s gross profit margin has a significant impact on its ability to exert pricing power, develop new products, and invest in marketing. These factors can determine the winner in a competitive market.

For fintech businesses like Remitly, gross profit tells us how much money the company gets to keep after covering the base cost of its products and services, which typically include transaction/payment processing, hosting, and bandwidth fees in addition to the costs necessary to onboard customers, such as identity verification.

Remitly’s unit economics are higher than the typical consumer internet business and signal that it has competitive products and services. As you can see below, it averaged a decent 59.2% gross margin over the last two years. That means for every $100 in revenue, roughly $59.20 was left to spend on selling, marketing, and R&D.

In Q3, Remitly produced a 58.7% gross profit margin, in line with the same quarter last year. Zooming out, the company’s full-year margin has remained steady over the past 12 months, suggesting its input costs have been stable and it isn’t under pressure to lower prices.

Unlike enterprise software that’s typically sold by dedicated sales teams, consumer internet businesses like Remitly grow from a combination of product virality, paid advertisement, and incentives.

Remitly is efficient at acquiring new users, spending 36.4% of its gross profit on sales and marketing expenses over the last year. This efficiency indicates relatively solid competitive positioning, giving Remitly the freedom to invest its resources into new growth initiatives.

Remitly has been an efficient company over the last two years. It was one of the more profitable businesses in the consumer internet sector, boasting an average EBITDA margin of 12.3%.

Analyzing the trend in its profitability, Remitly’s EBITDA margin rose by 19.5 percentage points over the last few years, as its sales growth gave it immense operating leverage.

In Q3, Remitly generated an EBITDA margin profit margin of 14.6%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

In Q3, Remitly reported EPS of $0.04, up from $0.01 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Remitly’s full-year EPS of $0.09 to grow 150%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Remitly has shown impressive cash profitability, driven by its cost-effective customer acquisition strategy that gives it the option to invest in new products and services rather than sales and marketing. The company’s free cash flow margin averaged 11.1% over the last two years, better than the broader consumer internet sector.

Taking a step back, we can see that Remitly’s margin expanded by 24.5 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

Remitly broke even from a free cash flow perspective in Q3. The company’s cash profitability regressed as it was 42.9 percentage points lower than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.

Companies with more cash than debt have lower bankruptcy risk.

Remitly is a profitable, well-capitalized company with $476.9 million of cash and $35.49 million of debt on its balance sheet. This $441.4 million net cash position is 13.2% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We were impressed by how significantly Remitly blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its revenue guidance for next quarter slightly missed and its EBITDA guidance for next quarter also fell short of Wall Street’s estimates, and this weighed on shares. The stock traded down 13.3% to $14.28 immediately following the results.

Updated: December 3, 2025 at 9:40 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Remitly.

Remitly is an amazing business ranking highly on our list. First of all, the company’s revenue growth was exceptional over the last three years. And while its ARPU has grown slowly over the last two years, its rising cash profitability gives it more optionality. On top of that, Remitly’s expanding EBITDA margin shows the business has become more efficient.

Remitly’s EV/EBITDA ratio based on the next 12 months is 10.6x. Analyzing the consumer internet landscape today, Remitly’s positive attributes shine bright. We like the stock at this price.

Wall Street analysts have a consensus one-year price target of $21.50 on the company (compared to the current share price of $13.33), implying they see 61.4% upside in buying Remitly in the short term.