Remitly Surpasses Profitability Hurdle with AI-Driven Margin Surge

Date of Call: Feb 18, 2026

Financials Results

• Revenue: Q4: $442M, up 26% YOY; Full Year: $1.635B, up 29% YOY
• Operating Margin: Q4 Adjusted EBITDA margin: 20%, highest ever; Full Year Adjusted EBITDA margin: ~17%, up more than 500 basis points YOY

Guidance:

• Q1 2026 revenue expected to be $436M-$438M, up 21% YOY.
• Full Year 2026 revenue expected to be $1.94B-$1.96B, up 19%-20% YOY.
• Q1 Adjusted EBITDA expected to be $82M-$84M, margin ~19%.
• Full Year Adjusted EBITDA expected to be $340M-$360M, margin ~18%.
• Expect revenue from new products to more than double in 2026.
• Q1 marketing spend per active customer expected to be roughly flat YOY.
• Expect positive GAAP net income each quarter and strong growth in free cash flow.

Business Commentary:

Strong Revenue Growth and Profitability:

• Remitly reported revenue of $1.635 billion for the full year 2025, up 29% year-over-year, with Q4 revenue at $442 million, up 26%.
• The company achieved an adjusted EBITDA of $272 million, with Q4 adjusted EBITDA margin reaching a record high of 20%.
• Growth was driven by rapid customer growth, expansion into new customer categories like high amount senders, and efficiency gains from AI-enabled operating enhancements and scale.

Expansion in High Amount Senders:

• High amount sender volumes grew 15 percentage points faster than low amount senders in 2025, with high amount sender volume increasing by 14% and very high amount sender volume by 105% year-over-year in Q4.
• This trend was supported by Remitly's unit economics optimized for lower transaction amounts, enabling competitive advantages when extending to higher send thresholds.

Geographic and Product Diversification:

• Remitly expanded its presence in the UAE, Japan, and plans for Saudi Arabia and Brazil, showcasing strong geographic diversification.
• The company launched new products like Remitly Business, Flex, and Remitly One, contributing to more than 1% of revenue in 2025, with plans to more than double new product revenue contribution in 2026.

Efficiency and Cost Management:

• Remitly achieved record GAAP profitability with net income of $68 million in 2025, a significant improvement from a net loss the previous year.
• The improvement was due to AI-driven fraud detection models, stablecoin usage for treasury operations, and a disciplined approach to hiring and cost management.

Leadership Transition and Strategic Vision:

• The company announced Sebastian Gunningham as the incoming CEO, emphasizing his experience in product rigor and operational discipline.
• The leadership change is part of a strategic plan to accelerate product delivery and realize Remitly's vision of providing trusted financial services that transcend borders.

Sentiment Analysis:

Overall Tone: Positive

• CEO called 2025 'phenomenal' and 'pivotal,' with 'incredible results.' Strong revenue growth (29% YOY), record adjusted EBITDA ($272M, exceeding guidance), record GAAP profitability ($68M net income), and 'very strong momentum' exiting 2025. New CEO expressed excitement and confidence in the company's mission, opportunity, and timing.

Q&A:

• Question from Tien-Tsin Huang (JPMorgan Chase & Co): Given your background, what's really interesting, I would love to hear a little bit more on how your prior experience prepares or informs your decision to join and lead Remitly given that it is a smaller consumer platform, different than some of the larger enterprise businesses that you led.
  Response: Sebastian Gunningham cited experience leading product/engineering orgs at top companies, running large businesses, being a CEO multiple times, and running Amazon's payments business as well as Santander's digital transformation, positioning him well to lead Remitly's scaling phase.

• Question from Ramsey El-Assal (Cantor Fitzgerald & Co.): What are you seeing out there in terms of kind of macro impacts to the business? I'm thinking things like FX or immigration policy or any other external factors.
  Response: Management attributed strong results to execution and marketing efficiencies, with customers resilient in geopolitical volatility. The 1% remittance tax on cash remittances is a tailwind for Q1, and diversification across geographies/customers/new products supports confidence in guidance.

• Question from Aditya Buddhavarapu (BofA Securities): When I look at the 2026 guidance, you talked about the 19% to 20% growth on revenues for the full year with Q1 actually being at 21%. So could you just talk a bit more about the cadence of revenues through the year? And then also related to the outlook for '26, when you exited Q4 with 20% adjusted EBITDA margin. For '26, the implied margin is close to about 18%, 19%. So could you just talk about what's driving maybe that sort of margin for the full year being lower than Q4?
  Response: Revenue cadence sees H1 similar to last year with growth moderating in H2; Q1 benefits from remittance tax and Ramadan timing. Full-year margin is expected to be slightly lower than Q4's 20% due to transaction loss rates normalizing to a historical range (9-13 bps) and planned investments in new products, balancing profitability with growth.

• Question from William Nance (Goldman Sachs Group, Inc.): When you look at the business kind of exiting the year in the mid-20s on revenue, margins expanding nicely, where do you feel like you can have the most impact in some of those things that Matt mentioned at the top of the script?
  Response: Sebastian Gunningham emphasized accelerating product development velocity to capitalize on large market opportunities, particularly in the business market, stating product velocity will create opportunities across these segments.

• Question from Cristopher Kennedy (William Blair & Company L.L.C.): You mentioned your history with data science and your enthusiasm around AI. Can you just provide more color as to kind of what the opportunity is at Remitly?
  Response: Sebastian Gunningham sees AI as a strong tailwind for incumbents like Remitly, providing operational efficiencies, customer-facing benefits, and software product advantages, viewing it as a multiplier for the company over time.

• Question from Alexander Markgraff (KeyBanc Capital Markets Inc.): I'd be curious to understand sort of what sort of observable benefits you've seen from Flex and One on wallet share. And then just sort of curious on willingness to pay.
  Response: Flex (Send Now, Pay Later) has shown promising results with ~120,000 users, revenue nearly doubling quarter-over-quarter, and unit economics in line with expectations. Flex users/members send more than non-Flex users, indicating higher engagement and reduced friction.

• Question from Darrin Peller (Wolfe Research, LLC): if you look at, it was obviously a very strong upside surprise. And so when we think about the opportunity you're seeing in terms of the higher spenders and maybe just reminding us what other scenarios, what other results drove -- I love to hear what you're seeing in terms of strategy around higher spenders and what's really driving that and maybe other factors all that you see in the quarter driving the upside.
  Response: High amount sender volumes grew >40% YOY, very high amount senders (> $10k/tx) grew ~105% YOY. Product improvements, raised send limits, and targeted marketing are resonating, driving record send per active user ($2,200) and strong growth rates.

Contradiction Point 1

Remittance Tax Tailwind Effectiveness and Timing

Contradiction on whether the new remittance tax is a tailwind for FY25 or FY26.

What are your thoughts on the earnings report? - Ramsey El-Assal (Cantor Fitzgerald & Co.)

2025Q4: The exceptional year was driven by strong execution... and the tailwind of the new 1% cash remittance tax provide confidence in guidance. - Vikas Mehta(CFO)

How are macroeconomic factors like FX and immigration policy impacting the business? - Tien-Tsin Huang (JPMorgan)

20251106-2025 Q3: The outlook is based on... the durability of the remittance business, and early benefits from the federal remittance tax (effective 2026) which is expected to be a net benefit. - Matthew Oppenheimer(CEO)

Contradiction Point 2

2026 Revenue Cadence and Growth Moderation

Contradiction on the expected pattern of growth rates across 2026.

The original question is missing from the input. Please provide the specific question to be rewritten. - Aditya Buddhavarapu (BofA Securities)

2025Q4: Growth rates typically moderate in the second half as the business scales. Q1 benefits from the 1% remittance tax tailwind and favorable Ramadan timing... - Vikas Mehta(CFO)

Can you explain the 2026 revenue cadence based on the 19-20% full-year growth guide and 21% Q1 growth? - Zachary Gunn (FT Partners)

20251106-2025 Q3: The deceleration is due to tougher year-over-year comparisons (H2 2025 had strong revenue growth) and planned marketing investments to set up for a strong FY26. - Vikas Mehta(CFO)

Contradiction Point 3

Growth Outlook and Guide Rationale

Contradiction on what drives confidence in the 2026 revenue guide.

What are your thoughts on the recent earnings report? - Ramsey El-Assal (Cantor Fitzgerald & Co.)

2025Q4: The exceptional year was driven by strong execution... and marketing efficiencies. Looking ahead, the predictability from a strong FY25... and the tailwind of the new 1% cash remittance tax provide confidence in guidance. - Vikas Mehta(CFO)

What macro factors (e.g., FX, immigration policy) are impacting the business, and did you grow through headwinds or are these factors not affecting performance? - Tien-Tsin Huang (JPMorgan Chase & Co.)

2025Q3: The outlook is based on a strong foundation from FY25, with durable remittance business trends... Early progress in new products... and customer categories provides optimism. The view is prudent, considering restrictive immigration stances and macro uncertainties... - Matthew Oppenheimer(CEO)

Contradiction Point 4

Product Momentum and Market Focus

Contradiction on the primary growth driver: new products vs. high-dollar senders.

William Nance of Goldman Sachs, what are your key takeaways from the earnings call? - William Nance (Goldman Sachs Group, Inc.)

2025Q4: The opportunity is vast, with significant traction in the consumer market and a large, underserved business market. Speeding up product development velocity is key to capturing opportunities in these large markets. - Sebastian Gunningham(CEO)

Given the focus on accelerating product innovation and operational benefits, where will you prioritize your impact as CEO and what are your main areas of focus? - Tien-Tsin Huang (JPMorgan Chase & Co.)

2025Q3: Growth is driven by expansion into higher-dollar senders, small businesses, and the shift from cash to digital remittances (aided by the 2026 tax). - Matthew Oppenheimer(CEO)

Contradiction Point 5

Timeline and Status of Remitly One Launch

The launch date for Remitly One is given as September 2025 in Q2, but by Q4, the product is already active with early results.

What are your thoughts on the current market conditions and their impact on revenue growth? - Alexander Markgraff (KeyBanc Capital Markets Inc.)

2025Q4: Flex, the 'Send Now, Pay Later' product, shows promising results: 120,000 users, revenue nearly doubling sequentially in Q4... - Vikas Mehta(CFO)

What early benefits have you observed in wallet share and willingness to pay for Flex and One? - Tien-Tsin Huang (JPMorgan)

2025Q2: Remitly One (membership program) launches in September 2025 and is designed to drive customer relationships... - Matthew B. Oppenheimer(CEO)