Online money transfer platform Remitly (NASDAQ: RELY) beat Wall Street’s revenue expectations in Q3 CY2025, 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.

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StockStory’s Take

Remitly’s third quarter results saw a significant negative market reaction despite the company exceeding Wall Street’s revenue and profit expectations. Management credited strong performance to expansion in customer segments such as high amount senders and small businesses, as well as rapid adoption of new products like Flex and Remitly One. CEO Matthew Oppenheimer emphasized that the quarter’s momentum was underpinned by improvements in reliability and customer trust, with over 94% of transactions completed in under an hour. Management acknowledged that growth outside core markets decelerated compared to prior periods, but highlighted continued share gains in the U.S. and Mexico as key contributors.

Looking ahead, Remitly’s guidance reflects a cautious approach, with management expecting a deceleration in revenue growth amid tougher comparisons and external headwinds. The company sees opportunities in upcoming regulatory changes, notably the shift from cash to digital remittances due to a new U.S. federal remittance tax, and continued expansion in product offerings like Flex and digital wallets. CFO Vikas Mehta noted that, while early tailwinds from new geographies and products are promising, restrictive immigration trends and broader macro uncertainties could weigh on new customer acquisition. Management intends to balance growth investments with disciplined cost control, focusing on expanding margins as new initiatives mature.

Key Insights from Management’s Remarks

Management highlighted rapid growth in new customer categories and products, as well as ongoing investments in technology and compliance, as key drivers of third quarter performance.

• Expansion of business customer base: Remitly Business, launched in the U.S. and expanded into the U.K. and Canada, saw sequential growth to nearly 10,000 active business users. Management credited product improvements and a low-touch onboarding process for driving nearly double the business send volume compared to last quarter.
• High amount sender growth: The company focused on customers sending over $1,000 per transfer, increasing platform limits and targeting strategic marketing in high-volume corridors. These efforts led to over 40% year-over-year growth in send volume from this segment, with average transaction sizes and mix both rising.
• Flex product adoption: Flex, Remitly’s “send now, pay later” feature, reached over 100,000 active users with sequentially doubling revenue. Management highlighted strong repayment trends, minimal incremental cost, and robust data-driven underwriting that leverages the company’s existing customer base.
• Geographic performance variation: U.S. revenue outpaced overall company growth, while the rest of the world segment experienced a deceleration due to tough comparisons. Mexico corridors outperformed the industry, driven by localized innovations like QR code-based cash pickup.
• Technology and risk management investments: The company maintained high transaction reliability (99.99% uptime) and leveraged AI-driven risk models to reduce fraud and lower transaction costs, contributing to margin expansion and improved customer experience.

Drivers of Future Performance

Remitly’s forward guidance is shaped by new product scaling, digital adoption trends, and regulatory shifts, but tempered by macro headwinds and customer mix changes.

• Regulatory-driven digital shift: Management expects the new U.S. remittance tax on cash transactions to accelerate the migration from physical to digital remittances, benefiting Remitly’s digital-first platform. However, the company believes the impact will ramp gradually and contribute more meaningfully over time.
• Product portfolio expansion: Early traction with Flex, Remitly One, and multicurrency wallet products is expected to drive deeper customer engagement and diversify revenue streams. Management sees future growth potential in credit offerings and broader financial services.
• Macro and immigration headwinds: The company remains cautious due to restrictive immigration policies in key sending countries and general economic uncertainties, which may slow new customer acquisition and weigh on growth despite product and geographic expansion.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will be monitoring (1) the pace of adoption and profitability from new products like Flex and Remitly One, (2) the impact of regulatory changes, such as the new U.S. remittance tax, on digital transaction volumes, and (3) execution on geographic and customer segment expansion—especially in business and high amount senders. Progress in AI-driven risk management and cost efficiencies will also be important markers of sustainable growth.

Remitly currently trades at $13.61, down from $16.47 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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