Delaware

7372

83-2301143

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

1111 Third Avenue,

Suite 2100

Seattle,

98101

(Address of ~~principal executive offices)~~Principal Executive Offices)

(Zip Code)

(Registrant’s telephone number, including area code)

~~(888) 736-4859~~

~~(Registrant’s telephone number, including area code)~~

~~(Former name, former address and former fiscal year, if changed since last report)~~Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

RELY

The Nasdaq Global Select Market


Large accelerated filer	☐☒	Accelerated filer	☐
Non-accelerated filer	☒☐	Smaller reporting company	☐
		Emerging growth company	☒☐

~~Securities registered pursuant to Section 12(b) of the Act:~~

~~Title of each class~~

~~Trading Symbol(s)~~

~~Name of each exchange on which registered~~

~~Common Stock, $0.0001 par value~~

~~RELY~~

~~NASDAQ~~

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

• our expectations regarding our revenue, expenses, and other operating results;

• our ability to acquire new customers and successfully retain existing customers;

• our ability to develop new products and services and bring them to market in a timely manner;

• our ability to achieve or sustain our profitability;

• our ability to maintain and expand our strategic relationships with third parties;

• our business plan and our ability to effectively manage our growth;

• our market opportunity, including our total addressable market;

• anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;

• ~~the COVID-19 pandemic, and its impact on our employees, customers, strategic partners, vendors, results of operations, liquidity, and financial condition;~~

• uncertainties regarding the impact of general economic and market conditions, including as a result of currency fluctuations, inflation, or regional and global conflicts or related government sanctions;

• our ability to maintain the security and availability of our solutions;

• our ability to maintain our money transmission licenses and other regulatory approvals;

• our ability to maintain and expand internationally; and

• our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our ~~solutions:~~solutions.

Item 1. Financial Statements (Unaudited)

REMITLY GLOBAL, INC.

(In thousands, except share and per share data)

Transaction expenses(1)

Customer support and operations(1)

Technology and development(1)

General and administrative(1)

(1) Exclusive of depreciation and amortization, shown separately, above

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

REMITLY GLOBAL, INC.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2023		2022
Net loss	Net loss	$	(12,962)	$	(2,429)	$	(22,180)	$	(23,559)	Net loss	$	(28,314)	$	(23,310)
Other comprehensive income (loss):
Other comprehensive income:										Other comprehensive income:
Foreign currency translation adjustments	Foreign currency translation adjustments	(293)		219		(309)		156		Foreign currency translation adjustments	348		4
Comprehensive loss	Comprehensive loss	$	(13,255)	$	(2,210)	$	(22,489)	$	(23,403)	Comprehensive loss	$	(27,966)	$	(23,306)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

REMITLY GLOBAL, INC.

Condensed Consolidated Statements of ~~Redeemable Converted Preferred Stock and~~ Stockholders’ Equity ~~(Deficit)~~

For the Three ~~and Nine~~ Months Ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022

(In thousands, except share ~~amounts~~data)

(unaudited)


		Three Months Ended March 31, 2023
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
			Shares			Amount
Balance as of January 1, 2023			173,250,865	$	17		$	854,276	$	(743)	$	(373,463)	$	480,087
Issuance of common stock in connection with ESPP			297,095	—			2,729		—		—		2,729
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units			3,589,965	1			4,992		—		—		4,993
Issuance of common stock for acquisition consideration			590,838	—			6,635		—		—		6,635
Issuance of common stock, subject to service-based vesting conditions, in connection with acquisition			104,080	—			581		—		—		581

Taxes paid related to net share settlement of equity awards			(99,550)	—			(1,413)		—		—		(1,413)
Stock-based compensation expense			—	—			29,775		—		—		29,775
Other comprehensive income			—	—			—		348		—		348



Net loss			—	—			—		—		(28,314)		(28,314)
Balance as of March 31, 2023			177,733,293	$	18		$	897,575	$	(395)	$	(401,777)	$	495,421


		Three Months Ended March 31, 2022
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
			Shares			Amount
Balance as of January 1, 2022			164,239,555	$	16		$	739,503	$	253	$	(259,444)	$	480,328







Issuance of common stock in connection with ESPP			202,213	—			1,882		—		—		1,882
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units			1,696,601	1			2,677		—		—		2,678


Stock-based compensation expense			—	—			9,921		—		—		9,921
Other comprehensive income			—	—			—		4		—		4

Net loss			—	—			—		—		(23,310)		(23,310)
Balance as of March 31, 2022			166,138,369	$	17		$	753,983	$	257	$	(282,754)	$	471,503

Three Months Ended September 30, 2021
Redeemable Convertible
Preferred Stock Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders'
(Deficit) Equity
Shares Amount Shares Amount
Balances as of July 1, 2021 127,410,631 $ 390,687 26,385,643 $ 3 $ 17,193 $ 575 $ (229,906) $ (212,135)
Repayment of non-recourse promissory note — — — — 3,060 — — 3,060
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (127,410,631) (390,687) 127,410,631 13 390,674 — — 390,687
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions — — 7,581,395 — 305,191 — — 305,191
Donation of common stock — — 181,961 — 6,933 — — 6,933
Issuance of common stock upon exercise of warrants — — 254,014 — — — — —
Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting of restricted stock units — — 1,951,856 — 2,341 — — 2,341
Stock-based compensation expense — — — — 4,861 — — 4,861
Other comprehensive income — — — — — (293) — (293)
Net loss — — — — — — (12,962) (12,962)
Balances as of September 30, 2021 — $ — 163,765,500 $ 16 $ 730,253 $ 282 $ (242,868) $ 487,683
Three Months Ended September 30, 2020
Redeemable Convertible
Preferred Stock Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders'
Deficit
Shares Amount Shares Amount
Balances as of July 1, 2020 117,788,521 $ 302,873 23,126,915 $ 2 $ 4,741 $ (29) $ (209,254) $ (204,540)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs 9,294,084 84,834 — — — — — —
Issuance of common stock upon exercise of stock options and vesting of early exercised options — — 938,220 — 975 — — 975
Stock-based compensation expense — — — — 1,329 — — 1,329
Other comprehensive income — — — — — 219 — 219
Net loss — — — — — — (2,429) (2,429)
Balances as of September 30, 2020 127,082,605 $ 387,707 24,065,135 $ 2 $ 7,045 $ 190 $ (211,683) $ (204,446)

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~REMITLY GLOBAL, INC.~~

~~Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)~~

~~For the Three and Nine Months Ended September 30, 2021 and 2020~~

(~~In thousands, except share amounts~~)

~~(unaudited)~~

Nine Months Ended September 30, 2021
Redeemable Convertible
Preferred Stock Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders'
(Deficit) Equity
Shares Amount Shares Amount
Balances as of January 1, 2021 127,082,605 $ 387,707 24,289,906 $ 2 $ 8,766 $ 591 $ (220,688) $ (211,329)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs 328,026 2,980 — — — — — —
Repayment of non-recourse promissory note — — — — 3,060 — — 3,060
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (127,410,631) (390,687) 127,410,631 13 390,674 — — 390,687
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions — — 7,581,395 — 305,191 — — 305,191
Donation of common stock — — 181,961 — 6,933 — — 6,933
Issuance of common stock upon exercise of warrants — — 254,014 — — — — —
Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting restricted stock units — — 4,021,834 1 6,374 — — 6,375
Issuance of common stock in a business combination — — 25,759 — 169 — — 169
Stock-based compensation expense — — — — 9,086 — — 9,086
Other comprehensive loss — — — — — (309) — (309)
Net loss — — — — — — (22,180) (22,180)
Balances as of September 30, 2021 — $ — 163,765,500 $ 16 $ 730,253 $ 282 $ (242,868) $ 487,683
Nine Months Ended September 30, 2020
Redeemable Convertible
Preferred Stock Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders'
Deficit
Shares Amount Shares Amount
Balances as of January 1, 2020 117,788,521 $ 302,873 22,425,112 $ 2 $ 1,292 $ 34 $ (188,124) $ (186,796)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs of $167 9,294,084 84,834 — — — — — —
Issuance of common stock upon exercise of stock options and vesting of early exercised options — — 1,640,023 — 1,901 — — 1,901
Stock-based compensation expense — — — — 3,852 — — 3,852
Other comprehensive loss — — — — — 156 — 156
Net loss — — — — — — (23,559) (23,559)
Balances as of September 30, 2020 127,082,605 $ 387,707 24,065,135 $ 2 $ 7,045 $ 190 $ (211,683) $ (204,446)

~~The accompanying notes are an integral part of these consolidated financial statements.~~

Table of Contents

REMITLY GLOBAL, INC.

Condensed Consolidated Statements of Cash Flows

~~Periods Ended September 30, 2021 and 2020~~(In thousands)

((unaudited)~~In thousands~~)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(28,314)	$	(23,310)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	3,029		1,517
Stock-based compensation expense, net	29,234		9,594


Other	1,083		83
Changes in operating assets and liabilities:
Disbursement prefunding	(44,157)		62,450
Customer funds receivable	69,608		(14,453)

Prepaid expenses and other assets	(12,078)		(6,221)
Operating lease right-of-use assets	1,184		807
Accounts payable	(4,512)		4,857
Customer liabilities	(7,448)		10,257
Accrued expenses and other liabilities	(6,841)		(4,362)
Operating lease liabilities	(355)		(969)
Net cash provided by operating activities	433		40,250
Cash flows from investing activities
Purchases of property and equipment	(864)		(872)
Capitalized internal-use software costs	(1,296)		(753)
Cash paid for acquisition, net of acquired cash, cash equivalents, and restricted cash	(40,933)		—
Net cash used in investing activities	(43,093)		(1,625)
Cash flows from financing activities




Proceeds from exercise of stock options	4,844		2,601


Taxes paid related to net share settlement of equity awards	(1,413)		—
Repayment of assumed indebtedness	(17,068)		—
Net cash (used in) provided by financing activities	(13,637)		2,601
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	219		117
Net (decrease) increase in cash, cash equivalents, and restricted cash	(56,078)		41,343
Cash, cash equivalents, and restricted cash at beginning of period	300,735		403,313
Cash, cash equivalents, and restricted cash at end of period	$	244,657	$	444,656
Supplemental disclosure of cash flow information
Cash paid for interest	$	341	$	227
Cash paid for income taxes	124		605
Supplemental disclosure of noncash investing and financing activities

Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	5,414	$	2,830
Vesting of early exercised options	149		205
Noncash issuance of common stock in connection with ESPP	2,729		1,882
Stock-based compensation expense capitalized to internal-use software	541		327
Issuance of common stock for acquisition consideration	6,635		—
Issuance of unvested common stock, subject to service-based vesting conditions, in connection with acquisition	581		—
Amounts held back for acquisition consideration	11,899		—
Settlement of preexisting net receivable in exchange for net assets acquired in business combination	2,401		—


Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	244,159	$	444,605
Restricted cash	498		51
Total cash, cash equivalents and restricted cash	$	244,657	$	444,656

~~(unaudited)~~

Nine Months Ended September 30,
2021 2020
Cash flows from operating activities
Net loss $ (22,180) $ (23,559)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization 3,890 2,859
Stock-based compensation expense, net 8,965 3,852
Donation of common stock 6,933 —
Other 360 27
Changes in operating assets and liabilities:
Disbursement prefunding (7,212) (30,345)
Customer funds receivable (29,072) (13,465)
Prepaid expenses and other assets (9,491) (4,952)
Operating lease right-of-use assets 2,023 1,803
Accounts payable 1,229 1,840
Customer liabilities 50,284 (28,916)
Accrued expenses and other liabilities 16,013 21,595
Operating lease liabilities (2,317) (1,915)
Net cash provided by (used in) operating activities 19,425 (71,176)
Cash flows from investing activities
Purchases of property and equipment (1,347) (1,825)
Capitalized internal-use software costs (1,941) (1,591)
Net cash used in investing activities (3,288) (3,416)
Cash flows from financing activities
Proceeds from issuance of common stock upon initial public offering and the private placement, net of underwriting discounts and commissions and other offering costs 307,094 —
Repayment of non-recourse promissory note 3,060 —
Proceeds from issuance of Series F convertible preferred stock, net of issuance costs 2,980 84,855
Proceeds from exercise of stock options 7,519 1,995
Payment of debt issuance costs (988) —
Repayments on borrowings, net (80,000) (45,000)
Net cash provided by financing activities 239,665 41,850
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (262) 338
Net increase (decrease) in cash, cash equivalents and restricted cash 255,540 (32,404)
Cash, cash equivalents, and restricted cash at beginning of period 188,075 183,520
Cash, cash equivalents, and restricted cash at end of period $ 443,615 $ 151,116
Supplemental disclosure of cash flow information
Cash paid for interest $ 936 $ 998
Cash paid for income taxes 303 334
Supplemental disclosure of non-cash investing and financing activities
Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 2,532 $ 1,523
Vesting of early exercised options 263 69
IPO and debt issuance costs incurred but not yet paid 2,287 —
Conversion of preferred stock to common stock 390,687 —
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents $ 443,313 $ 149,881
Restricted cash 302 1,235
Total cash, cash equivalents and restricted cash $ 443,615 $ 151,116

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

REMITLY GLOBAL, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Organization and Description of Business

Description of Business

Remitly Global, Inc. (the “Company” or “Remitly”) was incorporated in the State of Delaware in October 2018 and is headquartered in Seattle, Washington, with various other global office locations.

~~The Company provides integrated~~Remitly is a leading digital financial services toprovider for immigrants ~~including~~and their families in over 170 countries, helping customers send money internationally in a quick, reliable, and more cost-effective manner, by leveraging digital ~~channels. Remitly supports~~channels and supporting cross-border transmissions across the globe.

Unless otherwise expressly stated or the context otherwise requires, the terms “Remitly” and the “Company” inwithin these notes to the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements refer to Remitly Global, Inc. and its wholly-owned subsidiaries.

~~Initial Public Offering and Private Placement~~

In September 2021, the Company completed its initial public offering (the “IPO”), in which the Company issued and sold 7,000,000 shares of its common stock at $43.00 per share. Concurrently, 5,162,777 shares were sold by certain of the Company’s existing stockholders. In addition, the Company issued 581,395 shares of common stock to an existing stockholder in a private placement at the same offering price as the IPO. The Company received net proceeds of $305.2 million for the IPO and private placement, after deducting underwriting discounts and other fees of $20.8 million. In connection with the IPO, 127,410,631 shares of outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of common stock on a 1-to-one basis.

2.Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP and therefore the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the historical audited annual consolidated financial statements and related notes included in the Company’s ~~final prospectus dated September 22, 2021 and filed with~~Annual Report on Form 10-K, for the ~~SEC pursuant to Rule 424(b)(4) (the “Final Prospectus”).~~year ended December 31, 2022.

The accompanying unaudited interim ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the ~~Company's~~Company’s consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods. The interim results for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021,~~2023, or for any other future annual or interim period.

Principles of Consolidation

The ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements include the accounts of Remitly Global, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying ~~consolidated financial statements~~Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed inwithin the ~~consolidated financial statements~~Condensed Consolidated Financial Statements and accompanying notes. These estimates and assumptions include, but are not limited to, revenue recognition including the treatment of sales incentive programs, reserves for transaction losses, stock-based

compensation expense, ~~including the estimated fair value per share of common stock,~~ the carrying value of operating lease right-of-use assets, the recoverability of deferred tax assets, ~~and~~ capitalization of software development ~~costs.~~costs, goodwill, and the recoverability of intangible assets. The key assumptions applied for the intangible assets include forecasted revenue and growth rates for a hypothetical market participant, selected discount rates, as well as migration curves for developed technology. The Company bases its estimates on historical experience and on assumptions that management considers reasonable. Actual results could differ from these estimates and assumptions, and these differences could be material to the ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, disbursement prefunding, restricted cash, and customer funds receivable. The Company maintains cash and cash equivalents and restricted cash balances that may exceed the insured limits by the Federal Deposit Insurance Corporation. In addition, the Company funds its international operations using accounts with institutions in the major countries where its subsidiaries operate. The Company also prefunds amounts which are held by its disbursement partners, which are typically ~~include~~located in India, ~~Philippines~~Mexico, and ~~Mexico.~~the Philippines. The Company has not experienced any significant losses on its deposits of cash and cash equivalents, disbursement prefunding, restricted cash, or customer funds receivable in the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020.~~2022.

For the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, no individual customer represented 10% or more of the Company’s total revenues. ~~As of September 30, 2021~~For the three months ended March 31, 2023 and ~~December 31, 2020,~~2022, no individual customer represented 10% or more of the Company’s customer funds receivable.

~~Advertising~~

Table of Contents

Advertising Expense

Advertising expenses are charged to operations as incurred and are included as a component of ~~marketing expenses.~~‘Marketing expenses’ within the Condensed Consolidated Statements of Operations. Advertising expenses ~~totaled $25.6 million and $15.9 million during the three months ended September 30, 2021 and 2020, respectively, and~~ are used primarily to attract new customers. Advertising expenses totaled ~~$70.1~~$34.6 million and ~~$42.5~~$34.5 million during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, respectively.

Goodwill

Goodwill represents the excess of the purchase price over the acquisition date fair value of net assets, including the amount assigned to identifiable intangible assets, acquired in a business combination. The Company evaluates goodwill for impairment annually and whenever events or circumstances make it more likely than not that impairment may have occurred. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount. The Company considers factors in performing a qualitative assessment, including, but not limited to, general macroeconomic conditions, industry and market conditions, company financial performance, changes in strategy, and other relevant entity-specific events. If the Company elects to bypass the qualitative assessment or does not pass the qualitative assessment, a quantitative assessment is performed. The quantitative assessment compares the carrying value to the fair value of goodwill, with the difference representing an impairment loss.

Intangible Assets

Intangible assets with finite lives primarily consist of developed technology, customer relationships, and trade names acquired through business combinations or asset acquisitions. Intangible assets acquired through business combination are recorded at their respective estimated acquisition date fair value and amortized over their estimated useful lives. Other intangible assets acquired through asset acquisitions are recorded at their respective cost. Intangible assets are amortized using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be realized over their estimated useful lives, or straight lined if not materially different.

Long-Lived Assets

The Company assesses potential impairments to its long-lived assets when events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If any indicators of impairment are present, the Company tests recoverability. The carrying value of a long-lived asset or asset group is not recoverable if the carrying value exceeds the sum of the estimated undiscounted future cash flows expected to be generated from the use and eventual disposition of the asset or asset group. If the estimated undiscounted future cash flows do not exceed the asset or asset group’s carrying amount, then an impairment loss is recorded, measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its estimated fair value.

Transaction Costs

Transaction costs related to business combinations are expensed as incurred and are included in ‘General and Administrative Expenses’ within the Condensed Consolidated Statements of Operations. Transaction costs include acquisition and integration costs, as well as other amounts directly attributable to business combinations. These primarily include external legal, accounting, valuation, and due diligence costs, as well as advisory and other professional services fees necessary to integrate acquired businesses.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note ~~2, “Basis~~2. Basis of Presentation and Summary of Significant Accounting ~~Policies” in~~Policies within the Notes to Consolidated Financial Statements ~~as of December 31, 2020 and 2019 and~~included in the Company’s Annual Report on Form 10-K for the ~~years~~year ended December 31, ~~2020 and 2019 included in the Final Prospectus.~~2022. There have been no significant changes to these policies during the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2023, except as noted ~~below.~~

~~Deferred Offering Costs~~

Prior to the IPO, deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the IPO, were capitalized and included in other non-current assets on the condensed consolidated balance sheets. Upon completion of the IPO in September 2021, the Company reclassified $4.3 million of deferred offering costs to additional-paid-in capital offsetting the IPO proceeds. As of September 30, 2021, approximately $1.9 million of IPO costs were unpaid. Such amounts are recorded within accounts payable and accrued expenses and current liabilities in the Company’s condensed consolidated balance sheet. There were no ~~material deferred offering costs recorded as of~~ ~~December 31, 2020.~~above.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements ~~Not Yet Adopted~~ (“ASU”)

In October 2021, ~~The Financial Accounting Standards Board (“FASB”)~~the FASB issued ASU ~~2021-04, Earnings per Share~~2021-08, "Business Combinations (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)805): ~~Issuer’s~~ Accounting for ~~Certain Modifications or Exchanges~~Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"). ASU 2021-08 will require companies to apply the definition of ~~Freestanding Equity-Classified Written Call Options. The FASB~~a performance obligation under ASU 2014-09, Revenue from contracts with customers (“Topic 606”) to recognize and measure contract assets and contract liabilities relating to contracts with customers that are acquired in a business combination. Under current U.S. GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASU Topic 606. ASU 2021-08 is issuing this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments affect entities when a freestanding equity-classified written call option (such as a warrant) is modified or exchanged and remains equity classified after the modification or exchange. In addition, the

~~amendments impact the recognition and measurement of earnings per share for certain modification and exchange transactions. The new standard is~~ effective ~~for the Company~~ for fiscal years beginning after December 15, ~~2021, including interim periods within those fiscal years,~~2022 for public entities and December 15, 2023 for all other entities, with early adoption is permitted. The Company ~~is currently assessing~~assessed the impact of the guidance to its Condensed Consolidated Financial Statements for the three months ended March 31, 2023 and concluded that the standard did not have a material impact on its ~~consolidated~~ financial statements.

Table of Contents

Accounting Pronouncements Not Yet Adopted

There are other new accounting pronouncements issued by the FASB that ~~we have~~the Company has adopted or will adopt, as applicable. ~~We do~~The Company does not believe any of these accounting pronouncements have had, or will have, a material impact on ~~our condensed consolidated financial statements~~the Condensed Consolidated Financial Statements or disclosures.

3.Revenue

The Company’s primary source of revenue is generated onfrom its remittance business. Revenue is earned from transaction fees charged to customers and the foreign exchange spreads earned between the foreign exchange rate offered to customers and the foreign exchange rate on the ~~Company's~~Company’s currency purchases. Revenue is recognized when control of these services is transferred to the Company’s customers, which is the time the funds have been delivered to the intended recipient in an amount that reflects the consideration the Company expects to be entitled to in exchange for services provided. The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Revenue from Contracts with Customers (Topic 606), which includes the following steps:

(1)identification of the contract with a customer;

(2)identification of the performance obligations in the contract;

(3)determination of the transaction price;

(4)allocation of the transaction price to the performance obligations in the contract; and

(5)recognition of revenue when, or as, the Company satisfies a performance obligation.

Customers engage the Company to perform one integrated service — collect the customer’s money and deliver funds to the intended recipient in the currency requested. Payment is generally due from the customer upfront upon initiation of a transaction, when the customer simultaneously agrees to the Company’s terms and conditions.

Revenue is derived from each transaction and varies based on the funding method chosen by the customer, the size of the transaction, the currency to be ultimately disbursed, the rate at which the currency was purchased, the disbursement method chosen by the customer, and the countries to which the funds are transferred. The Company’s contract with customers can be terminated by the customer without a termination penalty up until the time the funds have been delivered to the intended recipient. Therefore, the Company’s contracts are defined at the transaction level and do not extend beyond the service already provided.

The Company’s service comprises a single performance obligation to complete transactions for the Company’s customers. Using compliance and risk assessment tools, the Company performs a transaction risk assessment on individual transactions to determine whether a transaction should be accepted. When the Company accepts a transaction and processes the designated payment method of the customer, the Company becomes obligated to its customer to complete the payment ~~transaction.~~transaction, at which time a receivable is recorded, along with a corresponding customer liability. None of the Company’s contracts contain a significant financing component.

The Company recognizes transaction revenue on a gross basis as it is the principal for fulfilling payment transactions. As the principal to the transaction, the Company controls the service of completing payments on its payment platform. The Company bears primary responsibility for the fulfillment of the payment service, is the merchant of record, contracts directly with its customers, controls the product specifications, and defines the value proposition of its services. The Company is also responsible for providing customer support. Further, the Company has full discretion over determining the fee charged to its customers, which is independent of the cost it incurs in instances where it may utilize payment processors or other financial institutions to perform services on its behalf. These fees paid to payment processors and other financial institutions are recognized as transaction expenses inwithin the ~~consolidated statements~~Condensed Consolidated Statements of ~~operations.~~Operations. The Company does not have any ~~deferred~~capitalized contract acquisition costs.

Deferred Revenue

The deferred revenue balances from contracts with customers were as follows:


	Three Months Ended March 31,
(in thousands)	2023		2022
Deferred revenue, beginning of the period	$	1,108	$	1,212
Deferred revenue, end of the period	833		1,068
Change in deferred revenue during the period	(275)		(144)

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2021 2020 2021 2020
Deferred revenue, beginning of the period $ 1,126 $ 274 $ 1,105 $ 137
Deferred revenue, end of the period 1,269 1,010 1,269 1,010
Change in deferred revenue during the period 143 736 164 873

Revenue recognized during the three ~~month periods~~months ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022 from amounts included in deferred revenue at the beginning of the period were ~~$0.3~~$0.6 million and ~~$0.2~~$0.5 million, respectively.

~~Revenue recognized during the nine month periods ended September 30, 2021 and 2020~~

~~from amounts included in deferred revenue at the beginning~~Table of ~~the period were $0.3 million and $0.1 million, respectively.~~Contents

Deferred revenue represents amounts received from customers for which the performance obligations are not yet fulfilled. Deferred revenue is primarily included within ~~accrued~~‘Accrued expenses and other current ~~liabilities and other non-current liabilities~~liabilities’ on the ~~consolidated balance sheets.~~Condensed Consolidated Balance Sheets, as the performance obligations are expected to be fulfilled within the next year.

Sales Incentives

The Company provides sales incentives to customers in a variety of forms. Cash incentives given to customers are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero. Those additional incentive costs that would have caused the customer level revenue to be negative are classified as advertising expenses and are included as a component of marketing expenses. In addition, referral credits given to a referrer are classified as marketing expenses.

During the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, payments made to customers resulted in reductions to revenue of ~~$4.3~~$7.6 million and ~~$3.7~~$4.9 million, respectively, and charges to sales and marketing expense of ~~$2.6~~$4.2 million and ~~$2.4 million, respectively.~~

During the nine months ended September 30, 2021 and 2020, payments made to customers resulted in reductions to revenue of $13.4 million and $12.2 million, respectively, and charges to sales and marketing expense of $8.4 million and $7.6$3.7 million, respectively.

Revenue by Geography

The following table presents the Company’s revenue disaggregated by primary geographical location:


	Three Months Ended March 31,
(in thousands)	2023		2022
United States	$	139,092	$	99,357
Canada	24,859		17,279
Rest of world	39,914		19,378
Total revenue	$	203,865	$	136,014

Revenue is attributed to the country in which the sending customer is located.

4.Property and Equipment

Property and equipment, net consisted of the following:


							March 31,		December 31,
(in thousands)	(in thousands)	September 30, 2021		December 31, 2020		(in thousands)	2023		2022
Capitalized internal-use software	Capitalized internal-use software	$	8,232	$	6,170	Capitalized internal-use software	$	15,422	$	14,072
Computer and office equipment	Computer and office equipment	4,342		3,422		Computer and office equipment	7,098		6,177
Furniture and fixtures	Furniture and fixtures	1,450		1,390		Furniture and fixtures	2,674		2,056
Leasehold improvements	Leasehold improvements	6,951		6,609		Leasehold improvements	7,879		7,036
Projects in process						Projects in process	50		722
		20,975		17,591			33,123		30,063
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	(11,750)		(7,916)		Less: Accumulated depreciation and amortization	(20,465)		(18,517)
Property and equipment, net	Property and equipment, net	$	9,225	$	9,675	Property and equipment, net	$	12,658	$	11,546

The Company capitalized ~~$0.5~~$1.6 million and ~~$0.6~~$1.1 million for internal-use software costs for three month periods ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, respectively. The Company capitalized ~~inconsequential amounts~~$0.5 million and $0.3 million of stock-based compensation costs to internal-use software ~~during~~for the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, respectively. The Company recorded amortization expense of $~~0.6~~0.9 million and ~~$0.4~~$0.7 million for the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020, respectively.~~2022, respectively, which is included in depreciation and amortization expense disclosed above.

As of March 31, 2023 and December 31, 2022, capitalized costs, net of accumulated amortization, were approximately $3.0 million and $2.5 million, respectively of which $1.5 million and $1.3 million, respectively was recorded within ‘Prepaid expenses and other current assets’ and $1.5 million and $1.2 million, respectively was recorded within ‘Other noncurrent assets, net’ on the Company's Condensed Consolidated Balance Sheets.


	Three Months Ended March 31,
(in thousands)	2023		2022
Technology and development	$	327	$	110
General and administrative	24		9
Total amortization	$	351	$	119

5. Business Combinations~~$1.8~~

Consideration Transferred


(in thousands)	Amount
Cash paid to selling shareholders	$	56,398
Equity issued to selling shareholders, including replacement of equity awards attributable to pre-combination services	7,216
Holdback liability to be settled in cash and Company equity	11,899
Effective settlement of pre-existing net receivable owed to the Company	2,401
Total consideration transferred	$	77,914

The holdback of cash and equity proceeds discussed above was recorded at its acquisition date fair value and is classified as a liability within ‘Other noncurrent liabilities’ on the Company’s Condensed Consolidated Balance Sheets. The portion of the holdback to be settled in Company shares continues to be recorded at its fair value through its settlement date, with changes recorded to earnings. The estimated fair value of the portion of the holdback liability that will be settled in equity uses both observable and unobservable inputs, specifically considering the price of the Company’s common stock, as well as the probability of payout at the end of the holdback period, and is considered a Level 3 measurement, as defined in ASC 820, Fair Value Measurement (“ASC 820”).

Fair Value of Assets Acquired and Liabilities Assumed~~nd $1.1~~


(in thousands)	Amount
Cash, cash equivalents, and restricted cash	$	15,465
Disbursement prefunding	6,016
Customer funds receivable, net	3,423
Prepaid expenses and other assets, net	1,084
Intangible Assets
Trade name	1,000
Customer relationships	8,500
Developed technology	12,000
Goodwill	54,989
Customer liabilities	(3,075)
Assumed indebtedness	(18,784)
Other liabilities, net	(2,704)
Total purchase price	$	77,914

Intangible Assets, including Goodwill

The acquired identified intangible assets have preliminary estimated useful lives ranging from three to five years.

Acquired Receivables

The fair value of the financial assets acquired include “Disbursement prefunding” and “Customer funds receivable, net”, with a fair value of $6.0 million and $3.4 million, respectively, as disclosed above. The Company expects to collect substantially all of these receivables.

The results of Rewire have been included within the Condensed Consolidated Financial Statements since the date of the acquisition. Rewire’s “Revenue” and ~~2020,~~“Net Loss” included within the Condensed Consolidated Financial Statements since the acquisition date was $3.2 million and $(8.5) million, respectively.

The goodwill recorded on the Condensed Consolidated Balance Sheets for the three months ended March 31, 2023 was attributable to the acquisition of Rewire completed within the period, as described further in Note 5.Business Combinations. There were no adjustments to goodwill during the three months ended March 31, 2023.


(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Estimated Remaining Useful Life (in years)
Trade name	$	1,000	$	(84)	$	916	2.8
Customer relationships	8,500		(531)		7,969		3.8
Developed technology	12,000		(600)		11,400		4.8
Total	$	21,500	$	(1,215)	$	20,285


(in thousands)	Amount
Remainder of 2023	$	3,644
2024	4,858
2025	4,858
2026	4,525
2027	2,400

Total	$	20,285

~~The following table presents information about~~Except for the ~~Company’s~~holdback liability related to the Rewire acquisition discussed in Note 5. Business Combinations, there were no financial assets and liabilities that ~~are~~were measured at ~~fair~~fair value ~~and indicates the fair value hierarchy of the valuation inputs used~~on a recurring basis as of March 31, 2023 and December 31, ~~2020:~~

As of December 31, 2020
(in thousands) Level 1 Level 2 Level 3 Total
Assets
Restricted cash
Certificates of deposit $ — $ 102 $ — $ 102
Total assets $ — $ 102 $ — $ 102

~~There are no other financial assets~~The Company previously invested approximately $80.0 million of its cash and ~~liabilities that are measured~~cash equivalents into a Level 2 term deposit during the three months ended March 31, 2022, which had an original maturity of three months or less at ~~fair value as~~the time of ~~September 30, 2021.~~

New Revolving Credit Facility

remaining $0.1 million was expensed as a debt extinguishment cost within interest expense in the condensed consolidated statement of operations for the three and nine months ended September 30, 2021.

The New Revolving Credit Facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the ability to dispose of assets, merge with other entities, incur indebtedness, grant liens, pay dividends or make other distributions to holders of its capital stock, make investments, enter into restrictive agreements, or engage in transactions with affiliates. As of ~~September 30, 2021,~~March 31, 2023 and December 31, 2022, financial covenants in the New Revolving Credit Facility include (1) a requirement to maintain a minimum Adjusted Quick Ratio of 1.50:1.00, which is tested quarterly and (2) a requirement to maintain a minimum Liquidity of $100.0 million, which is tested quarterly.The Company was in compliance with all financial covenants under the New Revolving Credit Facility as of March 31, 2023 and December 31, 2022.

The obligations under the New Revolving Credit Facility are guaranteed by the ~~Company’s~~ material domestic subsidiaries of Remitly Global, Inc., subject to customary exceptions, and are secured by substantially all of the assets of the borrowers and guarantors thereunder, subject to customary exceptions. Amounts of borrowings under the New Revolving Credit Facility may fluctuate depending upon transaction volumes and seasonality. ~~The Company was in compliance with all financial covenants as~~

As part of the acquisition of Rewire, the Company assumed short-term indebtedness of Rewire that represents an advance for future deposits from Rewire’s amended agreement with one of its financial partners (the “Amendment” and the “Depositor”, respectively). The Amendment has a maturity date of October 2023. The Depositor made an advance payment to Rewire with respect to future deposits (the “Advance for Future Deposits”). The original amount of approximately $2.8 million was transferred as ~~of September 30, 2021. In addition,~~an advance under the ~~New Revolving Credit Facility includes a letter of credit sub-facility.~~Amendment. As of ~~September 30, 2021,~~March 31, 2023, the Company had ~~$19.2~~$2.5 million ~~in standby letters of credit outstanding.~~

~~2020 Credit Agreement~~

12Assumed Short-term Debt of Rewire

As part of the acquisition of Rewire, the Company assumed the amounts due on a revolving credit line that Rewire had entered into in 2021 and the amounts due on a bridge loan that Rewire had entered into in 2022. The total outstanding amounts were repaid during the three months ended March 31, 2023, along with certain other acquired indebtedness, subsequent to the Company’s acquisition of Rewire and was included within the Condensed Consolidated Statements of Cash Flows as a financing activity.

~~well as trailing twelve month Consolidated Adjusted EBITDA (as defined in the Credit Agreement) measured on a quarterly basis.~~

The Company was in compliance with all financial covenants as of December 31, 2020. The Company’s obligations under the Credit Agreement are secured by substantially all of the assets of the Company other than intellectual property.

7.Table of Contents

9. Net Loss Per Common Share

~~Basic~~The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders is computed using the two-class method required for participating securities. Prior to the automatic conversion of all of its redeemable convertible preferred stock outstanding into common stock upon the completion of the IPO, the Company considered all series of the Company’s redeemable convertible preferred stock and early exercised stock options to be participating securities, as the holders of such stock have the right to receive dividends on a pari passu basis in the event that a dividend is declared on the common stock. Upon completion of the IPO, all of the Company’s redeemable convertible preferred stock was converted to common stock. After the IPO, the Company’s early exercised stock options continue to be participating in nature.

Under the two-class method, basic net loss per share is computed by dividing net loss adjusted to include deemed dividends on redeemable convertible preferred stock by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common shares by the weighted-average number of common shares determined for the ~~basic earnings per share plus the dilutive effect of stock options, restricted stock units (“RSUs”), common stock warrants and redeemable convertible preferred stock.~~periods indicated. As the Company reported a net loss, diluted net loss per share was the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive for all periods presented.

~~The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the periods indicated:~~


	Three Months Ended March 31,
(in thousands, except share and per share data)		2023		2022
Numerator:
Net loss		$	(28,314)	$	(23,310)


Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted		175,113,904		164,391,753
Net loss per share attributable to common stockholders:
Basic and diluted		$	(0.16)	$	(0.14)

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share amounts) 2021 2020 2021 2020
Numerator:
Net loss $ (12,962) $ (2,429) $ (22,180) $ (23,559)
Deemed dividend — — — —
Net loss attributable to common stockholders $ (12,962) $ (2,429) $ (22,180) $ (23,559)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted 31,641,400 21,868,865 26,055,903 21,186,012
Net loss per share attributable to common stockholders:
Basic and diluted $ (0.41) $ (0.11) $ (0.85) $ (1.11)

The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been ~~anti-dilutive:~~
As of September 30,
2021 2020
Redeemable convertible preferred stock — 127,082,605
Common stock warrants — 256,250
Stock options outstanding 24,061,073 19,934,198
RSUs outstanding(1)
1,301,084 —
Shares subject to repurchase 554,973 1,875,822
Total 25,917,130 149,148,875
antidilutive:


	As of March 31,
	2023	2022
Stock options outstanding	14,074,783	21,596,404
RSUs outstanding	23,910,861	5,476,101
ESPP	1,175,687	1,379,019
Shares subject to repurchase	61,683	363,384
Unvested common stock, subject to service-based vesting conditions, issued in connection with acquisition(1)	104,080	—
Equity issuable in connection with acquisition(1)	133,309	—
Total	39,460,403	28,814,908

______________

(1) ~~A portion~~Refer to Note 5. Business Combinations for further discussion of ~~these RSUs were subject~~equity issued or to ~~a performance-based vesting condition until September 22, 2021. See Note 10 for details on these awards. Includes 23,235 performance-based RSUs which legally vested but were not yet~~be issued ~~as common stock as of September 30, 2021.~~in connection with the Rewire acquisition.

8.10. Common Stock

As of ~~September 30, 2021,~~March 31, 2023, the Company has authorized 725,000,000 shares of common stock with a par value of $0.0001 per share. Each holder of a share of common stock is entitled to 1one vote for each share held at all meetings of stockholders and is entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors. Through ~~September 30, 2021~~March 31, 2023 and ~~December~~March 31, ~~2020,~~2022, no dividends have been declared or paid by the Company.

~~Donation to Remitly Philanthropy Fund~~

In July 2021, the Company’s board of directors approved the reservation of up to 1,819,609 shares of common stock (which was approximately 1.0% of the fully diluted capitalization as of June 30, 2021) that the Company may issue to or for the benefit of a 501(c)(3) nonprofit foundation or a similar charitable organization pursuant to the Company’s Pledge 1% commitment in equal installments over ten years. On September 10, 2021, the Company executed the stock donation agreement, pursuant to which it would issue the first installment of the Pledge 1% commitment to Remitly Philanthropy Fund, a donor advised fund that will be administered on its behalf by Rockefeller Philanthropy Advisors, Inc., on the day after consummation of the IPO. On September 28, 2021, the Company donated 181,961 shares of its common stock to Remitly Philanthropy Fund, pursuant to the stock donation agreement, and in connection with the Pledge 1% campaign, which publicly acknowledges the Company’s intent to give back and increase social impact, in order to sustainably fund a portion of its corporate social responsibility goals and further its mission to expand financial inclusion for immigrants. The Company recorded a charge ~~of $6.9 million~~ ~~to general and administrative expense based on the closing price of its common stock as reported on the Nasdaq Global Select Market (the “NASDAQ”) on September 28, 2021.~~

~~Warrants~~

In connection with a previous Credit Agreement, the Company issued stock warrants to purchase shares of common stock with terms of 10 years, exercisable at any time, and exercise prices ranging from $0.054 to $0.64 per share, subject to standard anti-dilution adjustments. The warrants were recorded as additional paid-in capital and capitalized as debt issuance costs on the consolidated balance sheets. On September 24, 2021, the holders of these stock warrants provided a notice of exercise and on September 30, 2021, warrants to purchase 256,250 shares of common stock were exercised in a cashless exercise, pursuant to the terms of the original warrant agreement, resulting in the issuance of 254,014 shares. There were no warrants outstanding as of September 30, 2021 and there were 256,250 warrants outstanding as of December 31, 2020.

9.~~Redeemable Convertible Preferred Stock~~

Upon completion of the IPO, all shares of the Company’s redeemable convertible preferred stock outstanding, totaling 127,410,631, were automatically converted into an equivalent number of shares of common stock on a 1-

~~to-one basis and their carrying value of $390.7 million was reclassified into stockholders’ equity. As of September 30, 2021, there were no~~ ~~shares of redeemable convertible preferred stock issued and outstanding.~~

In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $0.0001 per share with right and preferences, ~~including voting rights, designated from time to time by the Company’s board of directors.~~

~~The following table summarizes information regarding each series of redeemable convertible preferred stock outstanding as of December 31, 2020:~~

As of December 31, 2020
(in thousands, except share and per share amounts)
Series Shares Authorized Shares Issued and Outstanding Issuance Price Per Share Carrying Amount Aggregate Liquidation Preference
Series Seed 10,199,786 6,446,322 $ 0.27 $ 1,595 $ 1,741
Series Seed Prime 8,780,816 8,643,665 0.30 2,506 2,593
Series A 11,514,347 10,359,546 0.50 5,091 5,180
Series B 14,196,476 14,196,476 0.88 12,374 12,500
Series C 25,146,777 25,146,777 1.70 41,863 42,800
Series D 30,331,802 30,331,802 3.79 109,674 115,000
Series E 22,663,934 22,663,933 5.96 129,770 135,001
Series F 9,840,797 9,294,084 $ 9.15 84,834 85,000
Total 132,674,735 127,082,605 $ 387,707 $ 399,815

~~10.~~11. Stock-Based Compensation

~~In 2011, the Company adopted the Equity Incentive Plan (the “2011 Plan”), as amended, which provided~~Shares Available for the issuance of up to 43,899,677 incentive stock options, nonqualified stock options, restricted common stock, and RSUs and stock appreciation rights to employees, directors, officers, and consultants of the Company.

In September 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”, and together with the 2011 Plan, the “Plan”) as a successor to the 2011 Plan. The 2021 Plan authorizes the award of both incentive stock options, nonqualified stock options, restricted common stock, stock appreciation rights, restricted stock units, and performance and stock bonus awards. Pursuant to the 2021 Plan, incentive stock options may be granted only to Company employees. The Company may grant all other types of awards to its employees, directors, and consultants. The 2021 Plan is administered by the Company’s board of directors, which determines the terms of the options granted, including exercise price, number of options granted, and vesting period of such options. The 2021 Plan provides for the issuance of up to 25,000,000 shares of common stock, plus any reserved shares not issued or subject to outstanding grants under the 2011 Plan, which was 552,736 on the effective date of the 2021 Plan, for a total of 25,552,736 shares reserved for issuance under the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to 5% of the aggregate number of outstanding shares of all classes of common stock as of the immediately preceding December 31, or a lesser number as may be determined by the Company’s talent and compensation committee, or by the Company’s board of directors acting in place of the talent and compensation committee.

In addition, in September 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “ESPP”) to enable eligible employees to purchase shares of common stock with accumulated payroll deductions. The ESPP provides for the issuance of up to 3,500,000 shares of common stock. The number of shares reserved for issuance and sale under the ESPP will increase automatically on January 1 of each of 2022 through 2031 by the number of

shares equal to 1% of the aggregate number of outstanding shares of all classes of common stock as of the immediately preceding December 31, or a lesser number as may be determined by the Company’s talent and compensation committee, or by the Company’s board of directors acting in place of the talent and compensation committee. Subject to stock splits, recapitalizations, or similar events, no more than 35,000,000 shares of common stock may be issued over the term of the ESPP. The ESPP is intended to qualify under Section 423 of the Code, provided that the administrator may adopt sub-plans under the ESPP designed to be outside of the scope of Section 423 for participants who are non-U.S. residents. As of September 30, 2021, no awards have been granted under the ESPP, as the grant date criteria pursuant to ASC 718, ~~Stock-Based Compensation,~~ has not yet been met. The grant date for awards under the ESPP was met in October 2021, upon mutual agreement of terms and conditions, and the Company expects to recognize compensation expense related to the ESPP beginning with the fourth quarter of 2021.

Issuance

As of ~~September 30, 2021~~March 31, 2023 and December 31, ~~2020, 25,594,331~~2022, 17,353,843 and ~~206,529 options~~10,890,112 equity incentive awards remain available for issuance under the 2021 Plan, ~~and 2011 Plan,~~ respectively. ~~During the period ended September 30, 2021~~

As of March 31, 2023 and December 31, ~~2020, activity~~2022, 6,198,134 and ~~amounts related to awards to nonemployees~~4,762,721 shares of common stock remain available for issuance under the ~~Plan were not material.~~ESPP.

Table of Contents

Stock Options

Stock options granted under the Plan generally vest over a period from two years to four years from the vesting commencement date on a monthly basis with or without a one-year cliff or, for non-employees, ratably on a monthly basis over a shorter period, depending upon anticipated duration of services. Other vesting terms are determined by the Company’s board of directors. All options granted under the Plan are exercisable for up to ten years from the grant date, subject to vesting. In the event of termination of service, option will generally remain exercisable, to the extent vested, for three months following the termination of service.

The following is a summary of the Company’s stock option activity during the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2023:

Stock Options
(in thousands, except share and per share amounts) Number of Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years)
Aggregate Intrinsic Value (1)
Balances as of January 1, 2021 21,034,424 $ 1.88 7.82 $ 64,604
Granted 8,219,753 7.26
Exercised (4,021,834) 1.84 66,970
Forfeited (1,171,270) 3.24
Balances as of September 30, 2021 24,061,073 3.68 7.91 785,826
Vested and exercisable as of September 30, 2021 9,397,761 1.63 6.47 320,288
Vested and expected to vest as of September 30, 2021 24,561,046 $ 3.66 7.91 $ 802,853


	Stock Options
(in thousands, except share and per share data)	Number of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (1)
Balances as of January 1, 2023	15,988,268	$	4.11	6.79	$	119,467

Exercised	(1,659,193)	2.87			19,007
Forfeited	(254,292)	5.60
Balances as of March 31, 2023	14,074,783	4.23		6.56	179,001
Vested and exercisable as of March 31, 2023	9,237,232	2.60		5.81	132,531
Vested and expected to vest as of March 31, 2023	14,091,466	$	4.24	6.57	$	179,038

_________________

(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock.

~~The fair value of each employee~~No stock ~~option granted during the three and nine months ended September 30, 2021 and 2020 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:~~

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Risk-free interest rates 0.74% to 1.1% 0.30% to 0.40% 0.32% to 1.19% 0.30% to 1.47%
Expected term (in years) 5.0 to 6.5 years 5.1 to 6.1 years 3.5 to 6.8 years 5.0 to 6.1 years
Volatility 49.3% to 50.5 % 37.5% to 37.9 % 37.8% to 50.5 % 37.3% to 54.0 %
Dividend rate — % — % — % — %

~~Fair value of underlying common stock~~

Prior to the completion of the IPO, the Company’s board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awardsoptions were approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the NASDAQ.

~~The weighted-average grant date fair value of options~~ granted during the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020, was $15.31 and $1.28, respectively, and during the nine months ended September 30, 2021 and 2020 was $5.22 and $1.00, respectively.~~ March 31, 2022.

The aggregate grant-date fair value of options vested for the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022 was ~~$2.1~~$2.2 million and ~~$1.4~~$2.9 million, ~~respectively, and~~respectively. The intrinsic value of options exercised for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022 was ~~$5.4~~$19.0 million and ~~$3.8~~$12.6 million, respectively.

Restricted Stock Units

Restricted stock unit activity during the three months ended March 31, 2023 was as follows:


	Number of Shares	Weighted-Average Grant-Date Fair Value Per Share
Unvested at January 1, 2023	23,366,355	$	11.86
Granted	3,425,404	12.41
Vested	(1,930,772)	12.53
Cancelled/forfeited	(950,126)	14.10
Unvested at March 31, 2023	23,910,861	$	11.79

The weighted-average grant date fair value of RSUs, granted during the three months ended March 31, 2023 and 2022 was $12.41 and $13.06, respectively. The aggregate grant-date fair value of RSUs, vested for the three months ended March 31, 2023 and 2022 was $24.2 million and $0.5 million, respectively.

Employee Stock Purchase Plan (“ESPP”)

The offering period that commenced on September 22, 2021, for which the accounting grant date was met in October 2021, ended on February 28, 2022, due to a decline in the Company’s stock price at the end of the purchase period, triggering a new offering period, as required by the ESPP plan documents. A new 24-month offering period commenced on March 1, 2022. This event was accounted for as a modification under U.S. GAAP in the first quarter of 2022, whereby the fair value of the ESPP offering was measured immediately before and after modification, resulting in incremental stock-based compensation expense of $3.6 million, which is being recognized over the new offering period, which is deemed to be the requisite service period. A new subsequent 24-month offering period commences on March 1 and September 1 of each fiscal year.

Table of Contents

The fair value of the ESPP offerings described above were estimated using the Black-Scholes option-pricing model as of the respective offering dates, using the following assumptions. These assumptions represent the grant date fair value inputs for new offerings which commenced during the three months ended March 31, 2023 and 2022, as well as updated valuation information as of the modification date for any offerings for which a modification occurred during the periods presented herein:

Three Months Ended March 31,

2023

2022

Risk-free interest rates

4.83% to 5.13%

0.60% to 1.31%

Expected term (in years)

0.5 to 2.0 years

Volatility

48.9% to 59.5%

61.0% to 73.0%

Dividend rate

—

As the March 1, 2022 offering was accounted for as a modification to the October 2021 offering, the ESPP was fair valued immediately before and after modification on March 1, 2022 to assess the incremental fair value provided as a result of the modification. The inputs to the incremental fair value are included in the table above.

Stock-Based Compensation Expense

Stock-based compensation expense for stock options, RSUs, and the ESPP, included inwithin the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations,~~Operations, net of amounts capitalized to internal-use software, as described in Note 4,4. Property and Equipment, was as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2021 2020 2021 2020
Customer support and operations $ 40 $ 5 $ 77 $ 14
Marketing 486 216 1,207 627
Technology and development 1,698 533 3,522 1,548
General and administrative 2,516 575 4,159 1,663
Total $ 4,740 $ 1,329 $ 8,965 $ 3,852

~~Restricted Stock Units~~

Prior to the IPO, the Company granted performance-based RSUs (“PRSUs”) to employees and directors that continued both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. Both events were not deemed probable until consummated, and therefore, stock-based compensation expense related to these PRSUs remained unrecognized prior to the effectiveness of the IPO. Upon the effectiveness of the IPO, the performance-based vesting

condition was satisfied, and therefore, the Company recognized cumulative stock-based compensation expense of $1.1 million, using the accelerated attribution method for the portion of the awards for which the service-based vesting condition has been fully or partially satisfied. The remaining grant-date fair value of these PRSUs will be recognized over the remaining requisite service period.

Beginning in August 2021, the Company began granting RSUs to employees and directors with service-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The grant-date fair value of these RSUs will be recognized over the requisite service period.

~~Restricted stock unit activity, including PRSUs, during the nine months ended September 30, 2021 is as follows:~~

Number of Shares Weighted-Average Grant-Date Fair Value Per Share
Unvested at January 1, 2021 437,369 $ 3.54
Granted 863,715 23.16
Vested (23,235) 3.54
Cancelled/forfeited — —
Unvested at September 30, 2021 1,277,849 $ 16.80

~~No RSUs were granted during the three or nine months ended September 30, 2020.~~


	Three Months Ended March 31,
(in thousands)	2023		2022
Customer support and operations	$	205	$	93
Marketing	2,983		1,032
Technology and development	16,631		4,072
General and administrative	9,415		4,397
Total	$	29,234	$	9,594

As of ~~September 30, 2021,~~March 31, 2023, the total unamortized compensation cost related to all non-vested ~~share-based~~equity awards, ~~were $67.6~~including options and RSUs, was $258.7 million, which will be amortized over a weighted-average remaining requisite service period of approximately 2.9 years.

~~11.Related Party Arrangements~~ As of March 31, 2023, the total unrecognized compensation expense related to the ESPP was $5.8 million, which is expected to be amortized over the next 1.9 years.

The Company ~~had promissory note agreements with 2 executive employees in conjunction with their early exercise of~~did not record a material income tax benefit related to stock-based compensation expense and stock ~~options to purchase 1,800,000 shares of~~option exercises, during the ~~Company’s common stock. The principal amount of~~three months ended March 31, 2023 and 2022, since the notes was $3.1 million, and interest accrued at 2.83% on the outstanding principal amount annually. The notes were secured by the shares that were exercised. Based on the non-recourse nature of these agreements, the agreements were accounted for as grants of options to purchase common stock. The fair value of the stock options, determined using the Black-Scholes option pricing model was being recognized over the requisite service period.

~~The associated shares are legally outstanding and included in shares of common stock outstanding~~Company currently maintains a full valuation allowance against its net deferred tax assets in the ~~consolidated financial statements, but were historically excluded from the Company’s net loss per common share calculations, as these shares of common~~jurisdictions where material stock-based compensation expense charges are incurred, and stock were considered unvested until the underlying promissory notes were repaid. On August 23, 2021, the promissory notes were paid in full, including all accrued interest. After repayment of the loan, these shares are now considered outstanding for purposes of the Company’s net loss per common share calculations to the extent the shares are vested.option exercises occurred.

12. Related Party Arrangements

~~12.~~There were no new significant related party transactions for the three months ended March 31, 2023.

13. Income Taxes

The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusting for discrete items arising in that quarter.

The Company’s effective tax rates on pre-tax income were ~~(2.1)~~(1.3)% and ~~(8.7)~~(2.3)% for the three months ended ~~September 30, 2021~~March 31, 2023 and ~~2020,~~2022, respectively ~~and (5.1)% and (2.8)% for the nine months ended September 30, 2021~~ ~~and 2020, respectively.~~. The difference between the effective tax rate and the U.S. federal statutory rate of 21% in both periods was primarily the result of foreign income taxed at different rates and changes in the U.S. valuation allowance.

The Company maintains a full valuation allowance against the U.S. net deferred tax assets, as it believes that these deferred tax assets do not meet the more likely than not threshold.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and internationally. As of ~~September 30, 2021,~~March 31, 2023, tax years ~~2011~~2012 through ~~2020~~2022 remain open for examination by taxing authorities.

The Company has applied ASC 740, Income Taxes (“ASC 740”), and has determined that it has no uncertain tax positions both during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2023 and ~~2020, respectively.~~2022. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expense.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted by the United States on March 27, 2020. The CARES Act did not have a material impact on the Company’s provision for income taxes for the three and nine months ended September 30, 2021 or 2020.

~~13.401(k) Defined Contribution Plan~~Table of Contents

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all domestic employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company makes discretionary matching contributions that are funded in the following year. The Company matches 50% of the first 3% of compensation that a participant contributes to the 401(k) plan, up to a maximum of $1,000 per plan year. The Company contributed $0.2 million to the 401(k) plan for each of the nine months ended September 30, 2021 and 2020, respectively, which represents the current period contribution for the prior plan year. No contributions were made to the plan in the three months ended September 30, 2021 and 2020. The Company may also make discretionary profit-sharing contributions. No ~~profit-sharing contributions were made during the three and nine months ended September 30, 2021 and 2020.~~

14.Commitments and Contingencies

Guarantees and Indemnification

In the ordinary course of business to facilitate sales of its services, the Company has entered into agreements with, among others, suppliers and partners that include guarantees or indemnity provisions. The Company also enters into indemnification agreements with its officers and directors, and the Company’s certificate of incorporation and bylaws include similar indemnification obligations to its officers and directors. To date, there have been no claims under any indemnification ~~provisions,~~provisions; therefore, no such amounts have been accrued as of ~~September 30, 2021~~March 31, 2023 and December 31, ~~2020.~~2022.

Litigation and Loss Contingencies

Litigation

From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, threatened claims, breach of contract claims, and other matters. The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. Although the results of litigation and claims are inherently unpredictable, the Company believes that there was not at least a reasonable possibility that it had incurred a material loss with respect to such loss contingencies, as of ~~September 30, 2021~~March 31, 2023 and December 31, ~~2020.~~2022.

~~Reserve for Transaction Losses~~Indirect taxes

The Company is ~~exposed~~subject to ~~transaction losses including chargebacks, unauthorized credit card use,~~indirect taxation in various states and ~~fraud associated with customer transactions.~~foreign jurisdictions in which it conducts business. The Company ~~establishes reserves for such losses based on historical trends~~continually evaluates those jurisdictions in which indirect tax obligations exist to determine whether a loss is probable, as defined under U.S. GAAP, and ~~any specific risks identified in processing customer transactions. This reserve~~the amount can be estimated. Determination of whether a loss is ~~included in accrued expenses~~probable, and an estimate can be made, is a complex undertaking and takes into account the judgment of management, third-party research, and the potential outcome of negotiation and interpretations by regulators and courts, among other ~~current liabilities on~~information. Such assessments include consideration of management’s evaluation of domestic and international tax laws and regulations, external legal advice, and the ~~condensed consolidated balance sheets. The provision for transaction losses is~~

~~included as a component of transaction expenses on the consolidated statements of operations and comprehensive loss.~~

~~The table below summarizes~~extent to which they may apply to the Company’s ~~reserve for transaction losses for~~business and industry. The Company’s assessment of probability includes consideration of recent inquiries, potential or actual self-disclosure, and applicability of tax rules. As a result of this assessment, management accrued an estimated liability of approximately $8.3 million and $6.0 million as of March 31, 2023 and December 31, 2022, respectively, reflecting the ~~three~~amount that the Company believes is probable and ~~nine months ended September 30, 2021 and 2020:~~

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2021 2020 2021 2020
Beginning balance $ 2,321 $ 1,761 $ 3,250 $ 798
Provisions for transaction losses 5,492 2,652 20,065 11,277
Losses incurred, net of recoveries (6,306) (2,821) (21,808) (10,483)
Ending balance $ 1,507 $ 1,592 $ 1,507 $ 1,592

~~15.~~estimable. The estimated liability is recorded within ‘~~Accrued Expenses and Other Current Liabilities~~

Accrued expenses and other current liabilities ~~consisted of the following:~~

(in thousands) September 30, 2021 December 31, 2020
Trade settlement liability $ 20,618 $ 16,700
Accrued transaction expense 10,754 6,399
Accrued marketing expense 7,659 4,883
Reserve for transaction losses 1,507 3,250
Accrued salaries and benefits 5,975 1,960
Other accrued expenses 11,186 6,550
Total $ 57,699 $ 39,742

~~16.Segment and Geographical Information~~

~~The Company determines operating segments based~~’ on how its chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM is its Chief Executive Officer, who reviews the Company’s ~~operating results on a consolidated basis. The Company operates as 1 segment. Based on the information provided to and reviewed by the Company’s CODM,~~Condensed Consolidated Balance Sheets. Although the Company believes ~~that~~its indirect tax estimates and associated liabilities are reasonable, the ~~nature, amount, timing, and uncertainty~~final determination of its revenue and how it is affected by economic factors are most appropriately depicted through the Company’s primary geographical locations. Revenues recorded by the Company are substantially all from the Company’s single performance obligation which are earned from similar services for which the nature of associated fees and the related revenue recognition models are substantially the same.

~~The following table presents the Company’s revenue disaggregated by primary geographical location:~~

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2021 2020 2021 2020
United States $ 88,852 $ 53,486 $ 238,695 $ 139,310
Canada 15,025 9,004 39,980 19,595
Rest of world 17,367 9,300 44,675 18,034
Total revenue $ 121,244 $ 71,790 $ 323,350 $ 176,939

~~Revenue is attributed to the country in which the customer is located.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation~~

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2020 included in the Final Prospectus. You should read the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors thatindirect tax audits or settlements could ~~cause actual results to differ~~be materially ~~from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.~~

~~Overview~~

~~Remitly is a leading digital financial services provider for immigrants and their families in over 135 countries around the world.~~

~~Our differentiated approach to addressing the complexity of cross-border remittances and financial services is comprised of four core elements:~~

•~~Providing a simple and reliable way of sending money with our mobile-centric suite of products.~~ Today, over 90% of our customers engage with Remitly on their mobile phones, shifting what traditionally required waiting in line to speak with an agent to the palm of their hands. Our mobile app currently has a 4.9 iOS App Store rating with more than 582,000 reviewers and a 4.8 Android Google Play rating with more than 279,000 reviewers. We have achieved this level of engagement and these high ratings by designing mobile-centric products that make the customer experience simple and convenient and give our customers complete peace of mind.

•~~Conveniently putting money safely in the hands of our customers’ families, wherever they are, by relying on our global network~~. Our global network of funding and disbursement partnerships enables us to complete money transfers in over 1,800 corridors without the need to deploy local operations in each country. We have partner relationships with top tier banks and leading global payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, credit card or debit card, and alternative payment methods. Our disbursement network provides our customers with a choice of delivery and enables us to send (or pay-out) funds within minutes, to more than 3.6 billion bank accounts, over 660 million mobile wallets, and approximately 380,000 cash pickup locations (including retail outlets and banks). These partner relationships help drive a better customer experience, including faster transfers, higher acceptance rates, and enhanced reliability.

•~~Creating trusted and personalized experiences with our localization expertise at scale~~. We believe our expertise in localizing our marketing, products and customer support at scale is a key differentiator. For example, we tailor our customer experience with over 14 native languages and we drive peace of mind with our global customer support team. Additionally, for disbursement of funds, we partner with local brands that are among the most trusted and recognized by our customers, their families, and their other recipients.

•~~Using our data-driven approach to better serve our customers and provide more value~~. We have a data-driven approach to how we grow our business, prioritize our investments, and manage our operations. Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform inform our marketing investments and product development prioritization. In addition, we leverage our data platform and proprietary models to manage pricing, treasury, risk, and customer support.

The combination of our differentiated approach and our relentless focus on meeting the financial services needs of our immigrant communities has resulted in significant customer growth, high customer engagement, rapid send volume and transaction growth, and attractive customer economics built on top of an expansive global network.

~~Our Revenue Model~~

For our remittance business, which represents the vast majority of our revenue today, we generate revenue from transaction fees charged to customers and foreign exchange spreads applied to the customer’s principal.

Transaction fees vary based on the corridor, the currency in which funds are delivered to the recipient, the funding method a customer chooses (e.g., ACH, credit card, debit card, etc.), and the amount of the customer’s principal.

Foreign exchange spreads represent the difference between the foreign exchange rate offered to customers and the foreign exchange rate on the Company's currency purchases. They are an output of proprietary and dynamic models that are designed to provide fair and competitive rates to our customers, while generating a spread for the Company based on our ability to buy foreign currency at generally advantageous rates.

Revenue from transaction fees and foreign exchange spreads is reduced by customer promotions. For example, we may, from time to time, waive transaction fees for first-time customers, or provide customers with better foreign exchange rates on their first transaction. These incentives are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero. We consider these incentives as an investment in our long-term relationship with customers.

The trusted relationships we foster with our customers and the repeat nature of their sending behavior has resulted in strong revenue retention rates. This provides a reoccurring revenue stream with high visibility and predictability.

~~Initial Public Offering and Private Placement~~

In September 2021, the Company completed its IPO, in which the Company issued and sold 7,000,000 shares of its common stock at $43.00 per share. Concurrently, 5,162,777 shares were sold by certain of our existing stockholders. In addition, the Company concurrently issued 581,395 shares of common stock to an existing stockholder in a private placement at the same offering price as the IPO. The Company received net proceeds of $305.2 million for the IPO and private placement, after deducting underwriting discounts and other fees of $20.8 million. In connection with the IPO, 127,410,631 shares of outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of common stock on a one-to-one basis.

~~Key Business Metrics~~

We regularly review the following key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of these key business metrics discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors.

~~Active Customers~~

Three Months Ended September 30,
2021 2020
(in thousands)
Active customers 2,561 1,692

~~We believe that the number of our active customers is an important indicator of customer engagement and the overall growth of our business.~~

Active customers increased to approximately 2.6 million, or 51% growth, for the three months ended September 30, 2021, compared to the three months ended September 30, 2020. This increase was primarily due to an increase in new customers driven by investments in marketing spend, our seamless user experience, network

expansion, and the continued growth in adoption of digital remittances as a result of the COVID-19 pandemic. As Active customers are measured on a quarterly basis, the data for the nine month periods are not meaningful.

~~Send Volume~~

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(in millions)
Send volume $ 5,239 $ 3,245 $ 14,488 $ 8,429

We measure send volume to assess the scale of remittances sent using our platform. Our customers mostly send from the United States, Canada, United Kingdom, other countries in Europe, and Australia. The recipients are located in over 120 countries across the globe; the largest receive countries include India, the Philippines, and Mexico.

Send volume increased approximately 61% to $5.2 billion for the three months ended September 30, 2021, compared to $3.2 billion for the three months ended September 30, 2020. This increase was primarily due to the growth of active customers, which increased 51% over the same period, as well as more volume transferred per active customer, which resulted in higher average revenue per active customer during the quarter. We calculate average revenue per active customer, by taking revenue for the quarter, divided by quarterly active customers.

Send volume increased $6.1 billion, or 72%, to $14.5 billion for the nine months ended September 30, 2021, compared to $8.4 billion for the nine months ended September 30, 2020, largely due to higher transaction volumes from new and existing customers, partially offset by lower average send amount per active customer as a result of increasing geographic diversification, and a mix shift toward corridors with lower average send amounts.

~~Key Factors Affecting Our Performance~~

~~Ability to Retain Our Customers and Maintain High Customer Engagement~~

Our send volume is primarily driven by existing customers who regularly use our remittance product to send money home. We believe our mobile-first products and superior customer experience encourage high retention and repeat usage, which are important drivers of our performance.

~~We measure active customers to monitor the growth and performance of our customer base. During the third quarter of 2021,~~ ~~2.6~~ ~~million customers used Remitly to send money abroad, up 51% f~~rom the third quarter of 2020. The majority of our active customers send money for recurring, non-discretionary needs multiple times per month, providing a reoccurring revenue stream with high visibility and predictability.

~~Ability to Attract New Customers~~

Our long-term growth will depend, in part, on our continued ability to attract new customers to our platform. We intend to expand our customer base by launching new send and receive corridors, by continuing to innovate, and by providing the most trusted financial services for immigrants. We plan to continue to acquire new customers through digital marketing channels and word-of-mouth referrals from existing customers. We will also explore new customer acquisition channels. Given the nature of our business, new customer acquisition may negatively impact net loss and Adjusted EBITDA in the initial period, while positively impacting net loss and Adjusted EBITDA in subsequent periods.

~~Ability to Maintain Efficient Customer Acquisition~~

Our ability to efficiently acquire customers is critical to our growth and attractive customer economics. Online marketing competition, our ability to effectively target the right demographic, and competitor pricing will impact our customer acquisition strategy.

We have a history of successfully monitoring customer acquisitions costs (“CAC”) and will continue to be strategic and disciplined toward customer acquisition. For example, for performance marketing, we set rigorous customer acquisition targets that we continuously monitor to ensure a high return on investment over the long term, and we can increase or decrease this investment as desired.

~~Corridor Mix~~

Our business is global and certain attributes of our business vary by corridor such as send amount, customer funding sources, and transaction frequency. For example, a period of high growth in receive corridors with large average send amounts, such as India, could disproportionately impact send volume while impacting active customers to a lesser extent. While shifts in our corridor mix could impact the trends in our global business, including send volume and customer economics, our strategy is to manage and optimize each of these corridors over the long term based on their specific dynamics.

~~Seasonality~~

Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results. For example, active customers and send volume generally peak as customers send gifts for regional and global holidays including, most notably, in the fourth quarter around the Christmas holiday. This seasonality typically drives higher fourth quarter customer acquisition, which generally results in higher fourth quarter marketing costs and transaction losses. It also results in higher transactions and transaction expenses, along with higher working capital needs. Other periods of seasonality include Ramadan/Eid, Lunar New Year/Tết and Mother's Day, although the impact is generally lower than in the fourth quarter. The number of business days in a quarter and the day of week that the last day of the quarter falls on may also introduce variability in our results, balance sheet, or cash flows.

~~Ability to Invest in Our Technology Platform and Introduce New Products~~

We will continue to invest significant resources in our technology platform. These investments will allow us to introduce new and innovative products, add features to current products, enhance the customer and recipient experience, grow our payment and disbursement network, invest in our risk and security infrastructure, and continue to secure data in accordance with changing best practices and legal requirements. While we expect our expenses related to technology and development to increase, which may impact short-term profitability, we believe these investments will ultimately contribute to our long term growth.

~~Ability to Manage Risk and Fraud~~

We manage fraud (e.g., through identity theft) and other illegitimate activity (e.g., money laundering) by utilizing our proprietary risk models built on machine learning processes, early warning systems, bespoke rules, and manual investigation processes. Our models and processes enable us to identify and address complex and evolving risks in these unwanted activities, while maintaining a differentiated customer experience. In addition, we integrate historical fraud loss data and other transaction data into our risk models which helps us identify emerging patterns and quantify fraud and regulatory and compliance risks across all aspects of our customer interactions. This allows us to achieve and maintain fraud loss rates within desired guardrails.

~~Macroeconomic and Geopolitical Changes~~

Global macroeconomic and geopolitical factors, including immigration, trade and regulatory policies, unemployment, foreign currency fluctuations, and the rate of digital remittance adoption impact demand for our services and the options that we can offer. These factors evolve over time and periods of significant currency appreciation or depreciation, whether in send or receive currencies, changes to global migration patterns, and changes to digital adoption trends may shift the timing and volume of transactions using our service.

~~Impact of the COVID-19 Pandemic~~

The COVID-19 pandemic has caused significant disruption worldwide and many of our customers and employees have been impacted, resulting in increased demand for digital remittances, driving a significant acceleration in our new customer growth.

We have also experienced, and may continue to experience, a modest adverse impact on our business practices, including as a result of transitioning part of our workforce to work from home and establishing strict health and safety protocols for our offices. Our customer support and operations teams, both internal and third-party, have been impacted, which has affected our ability to service customer needs due to longer wait times.

Certain operating expenses have grown more slowly due to reduced business travel and the virtualization or cancellation of events. While a reduction in some operating expenses may have an immediate positive impact on our operating results, we do not yet have visibility into the full impact this will have on our business longer term. As COVID-19 vaccination rates increase and people begin to return to offices and other workplaces and travel more, the positive impacts of the COVID-19 pandemic on our business may slow or decline.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, cash flows, and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted. We do not yet know the full extent of potential impacts on our business or operations.

We will continue to actively monitor the situation and may take further actions that may alter our business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, or business partners.

~~Throughout the COVID-19 pandemic, the Company has remained focused on serving its customers and communities, as well as the well-being of its employees.~~

~~Components of Results of Operations~~

~~Revenue~~

~~The Company’s revenue is generated on transaction fees charged to customers and foreign exchange spreads on transactions where the payout currency is other~~different than the functional currency. Revenue is recognized when control of these services is transferred to the Company’s customers, which is the time the funds have been delivered to the intended recipient in an amount that reflects the consideration the Company expects to be entitled to in exchange for services provided.amounts recorded.

~~Costs and expenses~~

~~Transaction Expenses~~

Transaction expenses include fees paid to disbursement partners for paying funds to the recipient, provisions for transaction losses, fees paid to payment processors for funding transactions, bad debt expense, fraud prevention and compliance tools.

Reserve for Transaction Losses

The table below summarizes the Company’s reserve for transaction losses for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
(in thousands)	2023		2022
Beginning balance	$	3,762	$	3,134
Provisions for transaction losses	10,108		10,590
Losses incurred, net of recoveries	(10,801)		(9,905)
Ending balance	$	3,069	$	3,819

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15. Accrued Expenses & Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	March 31,		December 31,
(in thousands)	2023		2022
Trade settlement liability(1)	$	14,858	$	26,266
ESPP employee contributions	760		1,926
Accrued transaction expense	17,015		15,878
Accrued marketing expense	11,907		11,394
Reserve for transaction losses	3,069		3,762
Accrued salaries and benefits	8,840		4,026
Accrued taxes and taxes payable	10,901		8,288
Other accrued expenses	12,129		16,212
Total	$	79,479	$	87,752

_________________

(1) The trade settlement liability amount represents the total of book overdrafts and disbursement postfunding liabilities owed to the Company’s disbursement partners. Refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies within the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for further discussion.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our Condensed Consolidated Financial Statements and the related notes, appearing elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report on Form 10-K for the year ended December 31, 2022. You should read the sections titled “Risk Factors” in this Quarterly Report on Form 10-Q as well as in the Annual Report on Form 10-K and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

Overview

Remitly is a leading digital financial services provider for immigrants and their families in over 170 countries around the world. The combination of our differentiated approach and our relentless focus on meeting the financial services needs of our immigrant communities has resulted in significant customer growth, high customer engagement, rapid send volume and transaction growth, and attractive customer economics built on top of an expansive global network.

Our brand promise is to bring “peace of mind” into everything we do. We focus on bringing trust, reliability, and a fair and transparent price to cross-border remittances and complementary financial services.

To deliver on our brand promise, we have a differentiated approach that aligns with the specific needs and interests of our customers and solves the problems immigrant communities often face in making remittances. There are four core elements to our differentiated approach:

•Providing a Simple and Reliable Way of Sending Money with Our Mobile-Centric Suite of Products. As of March 31, 2023, our mobile app had a 4.9 iOS App Store rating with approximately 1 million reviewers and a 4.8 Android Google Play rating with more than 580,000 reviewers. We have achieved this level of engagement and these high ratings by designing mobile-centric products that make the customer experience simple and convenient and give our customers complete peace of mind.

Our mobile app for cross-border remittances provides an easy-to-use, end-to-end process. In just a few minutes, customers are able to set up and send money for the first time with Remitly, and repeat transactions become easier with just a few taps. Our customers and their families can also track the status of their transactions in real time. This mobile-centric experience enables us to engage beyond the initial transaction, generating strong repeat usage and high customer loyalty.

•Conveniently Putting Money Safely in the Hands of Our Customers’ Families, Wherever They Are, by Relying on Our Global Network. Our global network of funding and disbursement partnerships enables us to complete money transfers in over 4,500 corridors without the need to deploy local operations in each country. We are able to do this while complying with global and local licensing and regulatory requirements. A corridor represents the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent. As a result of the quality of our network and the foundational investments we have made, in general, every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly.

Our disbursement options within our global network continue to grow and remain an important driver of customer loyalty. We have partner relationships with global banks and leading payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, card-based payments, and alternative payment methods. Our disbursement network provides our customers with various digital and traditional delivery methods and enables us to send (or pay-out) funds to approximately 4.0 billion bank accounts, approximately 1.2 billion mobile wallets, and over 445,000 cash pickup locations. We focus on creating financial inclusion by providing payout optionality and access for recipients who do not always have convenient access to traditional banking. We believe our focus on financial inclusion creates peace of mind for our customers and their families while attracting and retaining loyal customers. We continue to believe the quality of our network and our focus on customer preference in disbursement options remains a competitive differentiator.

•Creating Trusted and Personalized Experiences with Our Localization Expertise at Scale. We believe our expertise in localizing our marketing, products, and customer support at scale is a key differentiator and enables us to provide customers with a personalized experience that drives peace of mind. Localization can mean many things. To us, it means speaking with our customers in their preferred language, reaching them through the media channels they frequent, and being culturally relevant through their journey. While our business is global, we recognize the importance of a culturally relevant experience being delivered to our customers and their families in the many countries we serve. We strive to deliver marketing, product, and support experiences that connect with them in meaningful ways. For example, we tailor our customer experience with 15 native languages, and we provide peace of mind with our global customer support team. Additionally, for disbursement of funds, we partner with local brands that are among the most trusted and recognized by our customers and their families.

•Using Our Data-Driven Approach to Better Serve Our Customers and Provide More Value. We have a data-driven approach to how we grow our business, prioritize our investments, and manage our operations. Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform inform our marketing investments and product development prioritization. In addition, we leverage our data platform and proprietary models to improve our compliance systems and manage pricing, treasury, fraud risk, and customer support.

Acquisition of Rewire

On January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (O.S.G) Research and Development Ltd., a company organized under the laws of the State of Israel (“Rewire”), for approximately $77.9 million of aggregate consideration, the majority of which was or will be settled in cash, with the remaining consideration settled or to be settled in Remitly equity. The acquisition of Rewire allows us to accelerate our opportunity to differentiate the remittance experience with complementary products, by bringing together our remittance businesses in new geographies, along with a strong team that is culturally aligned with Remitly.

Our Revenue Model

For our remittance business, which represents substantially all of our revenue today, we generate revenue from transaction fees charged to customers and foreign exchange spreads applied to the amount the customer is sending.

Foreign exchange spreads represent the difference between the foreign exchange rate offered to customers and the foreign exchange rate on the Company’s currency purchases. They are an output of proprietary and dynamic models that are designed to provide fair and competitive rates to our customers, while generating a spread for the Company based on our ability to buy foreign currency at generally advantageous rates.

Revenue from transaction fees and foreign exchange spreads is reduced by customer promotions. For example, we may, from time to time, waive transaction fees for first-time customers, or provide customers with better foreign exchange rates on their first transaction. These incentives are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero. We consider these incentives to be an investment in our long-term relationship with customers.

Key Business Metrics

•“Active customers” is defined as the number of distinct customers that have successfully completed at least one transaction using Remitly during a given calendar quarter. We identify customers through unique account numbers.

•“Send volume” is defined as the sum of the amount that customers send, measured in U.S. dollars, related to transactions completed during a given period. This amount is net of cancellations, does not include transaction fees from customers, and does not include any credits, offers, or bonuses applied to the transaction by us.

As active customers are measured on a quarterly basis, the data for the full-year periods for active customers is not meaningful, and therefore this metric is only presented on a quarterly basis herein.

Active Customers


	Three Months Ended March 31,
(in thousands)	2023	2022

Active customers	4,559	3,042

We believe that the number of our active customers is an important indicator of customer engagement and the overall growth of our business.

Active customers increased to approximately 4.6 million, or 50% growth, for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. This increase was primarily due to an increase in new customers, driven by investments in our mobile platform and efficient marketing spend, our focus on customer experience, expansion of our global disbursement network, including the Rewire acquisition, and the continued diversification across both send and receive countries. While we continue to see strong results in our largest existing receive countries, our successful diversification of our corridor portfolio across both send and receive countries has contributed to new customer growth.

Send Volume


	Three Months Ended March 31,
(in millions)	2023		2022

Send volume	$	8,544	$	6,094

We measure send volume to assess the scale of remittances sent using our platform. Our customers mostly send from the United States, Canada, and other countries in Europe. Our customers and their recipients are located in over 170 countries and territories across the globe; the largest receive countries by send volume include India, Mexico, and the Philippines.

Send volume increased 40% to $8.5 billion for the three months ended March 31, 2023, compared to $6.1 billion for the three months ended March 31, 2022, driven by the increase in active customers.

Key Factors Affecting Our Performance

Customer Retention and High Customer Engagement

We measure active customers to monitor the growth and performance of our customer base. The majority of our active customers send money for recurring, non-discretionary needs multiple times per month, providing a recurring revenue stream with high visibility and predictability.

Attracting New Customers

Our continued ability to attract new customers to our platform is a key driver for our long-term growth. We continue to expand our customer base by launching new send and receive corridors, by continuing to innovate on existing and new products, and by providing the most trusted financial services for immigrants. We plan to continue to acquire new customers through digital marketing channels and word-of-mouth referrals from existing customers, and by exploring new customer acquisition channels. Given the nature of our business, new customer acquisition may negatively impact net loss and Adjusted EBITDA in the initial period, while positively impacting net loss and Adjusted EBITDA in subsequent periods.

Customer Acquisition

Efficiently acquiring customers is critical to our growth and maintaining of attractive customer economics, which are impacted by online marketing competition, our ability to effectively target the right demographic, and competitor pricing. We have a history of successfully monitoring customer acquisition costs and will continue to be strategic and disciplined toward customer acquisition. For example, for performance marketing, we set rigorous customer acquisition targets that we continuously monitor to ensure a high return on investment over the long term, and we can increase or decrease this investment as desired. Customer acquisition costs refer to direct marketing expenses deployed to acquire new customers and primarily include digital advertising costs. As we look ahead, we remain focused on driving efficiencies across the marketing funnel.

Corridor Mix

Our business is global and certain attributes of our business vary by corridor, such as send amount, customer funding sources, and transaction frequency. For example, a period of high growth in receive corridors with large average send amounts, such as India, could disproportionately impact send volume while impacting active customers to a lesser extent. While shifts in our corridor mix could impact the trends in our global business, including send volume and customer economics, we have the ability to optimize these corridors over the long term based on their specific dynamics.

Seasonality

Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results. For example, active customers and send volume generally peak as customers send gifts for regional and global holidays including, most notably, in the fourth quarter around the Christmas holiday. This seasonality typically drives higher fourth quarter customer acquisition, which generally results in higher fourth quarter marketing costs and transaction losses. It also results in higher transactions and transaction expenses, along with higher working capital needs. Other periods of favorable seasonality include Ramadan/Eid, Lunar New Year/Tết, and Mother’s Day, although the impact is generally lower than the seasonality we see in the fourth quarter. Conversely, we typically observe lower customer acquisition and existing customer activity through most of the first quarter, especially in regions that experience favorable seasonality in the fourth quarter.The number of business days in a quarter and the day of week that the last day of the quarter falls on may also introduce variability in our results, working capital balances, or cash flows period over period.

Our Technology Platform

We will continue to invest significant resources in our technology platform. These investments will allow us to introduce new and innovative products, add features to current products, enhance the customer and recipient experience, grow our payment and disbursement network, invest in our risk and security infrastructure, and continue to secure data in accordance with evolving best practices and legal requirements. While we expect our expenses related to technology and development to increase, which may impact short-term profitability, we believe these investments will ultimately contribute to our long-term growth.

Management of Risk and Fraud

We manage fraud (e.g., through identity theft) and other illegitimate activity (e.g., money laundering) by utilizing our proprietary risk models, which include machine learning processes, early warning systems, bespoke rules, and manual investigation processes. Our models and processes enable us to identify and address complex and evolving risks in these unwanted activities, while maintaining a differentiated customer experience. In addition, we integrate historical fraud loss data and other transaction data into our risk models, which helps us identify emerging patterns and quantify fraud and compliance risks across all aspects of our customer interactions. These models and processes allow us to achieve and maintain fraud loss rates within desired guardrails, as well as tailor our risk models to target other illegitimate activity.

Macroeconomic and Geopolitical Changes

Global macroeconomic and geopolitical factors, including inflation, currency fluctuations, immigration, trade and regulatory policies, the conflict in Ukraine, unemployment, potential recession, and the rate of digital remittance adoption impact demand for our services and the options that we can offer. These factors evolve over time, and periods of significant currency appreciation or depreciation, whether in send or receive currencies, changes to global migration patterns, and changes to digital adoption trends may shift the timing and volume of transactions, or the number of customers using our service. In addition, foreign currency movements do impact our business in numerous ways. For example, as the U.S. dollar strengthens, we see customers in certain markets taking advantage of the ability to get more local currency to their families and friends. We also believe the strength of the U.S. dollar and the strength of other developed market currencies versus emerging market currencies make it easier to acquire new customers in certain markets. Conversely, expansion of our international business can negatively impact our condensed consolidated results when these currencies weaken against the U.S. dollar. As we grow we are becoming more diversified across geographies and currencies which can help mitigate some localized geopolitical risks and macroeconomic trends. As foreign currency can have a significant impact on our business, we strive to maintain a diversified cash balance portfolio and frequently assess for foreign currency cash concentrations. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies in the Notes to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a more comprehensive description of current business concentrations.

Components of Results of Operations

Revenue

The Company’s revenue is generated on transaction fees charged to customers and foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on the Company’s currency purchases. Revenue is recognized when control of these services is transferred to the Company’s customers, which is the time the funds have been delivered to the intended recipient in an amount that reflects the consideration the Company expects to be entitled to in exchange for services provided.

Costs and expenses

Transaction Expenses

Transaction expenses include fees paid to disbursement partners for paying funds to the recipient, provisions for transaction losses, and fees paid to payment processors for funding transactions. Transaction expenses also include credit losses, chargebacks, fraud prevention, fraud management tools, and compliance tools. Over the long term we expect to continue to benefit from increasing scale and improvements in our proprietary fraud models, although we expect some variability in transaction expense from quarter to quarter.

Reserve for Transaction Losses

The Company is exposed to transaction losses, including chargebacks, unauthorized credit card use, ~~and~~ fraud associated with customer ~~transactions.~~transactions, and other non-fraud-related losses. The Company establishes reserves for such losses based on historical trends and any specific risks identified in processing customer transactions. This reserve is included in ~~accrued~~‘Accrued expenses and other current liabilities’ on the ~~consolidated balance sheets.~~Condensed Consolidated Balance Sheets. The provision for transaction losses is included as a component of ~~transaction~~‘Transaction expenses on’ within the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations.~~Operations.

Customer Support and Operations

Customer support and operations expenses consist primarily of personnel-related expenses associated with the Company’s customer support and operations organization, including salaries, benefits, and stock-based compensation expense, as well as third-party costs for customer support services, and travel and related office expenses. This includes our customer service teams which directly support our customers, consisting of online support and call centers, and other costs incurred to support our customers, including related telephony costs to support these teams, customer protection and risk teams, investments in tools to effectively service our customers, ~~as well as~~and increased customer self-service capabilities. Customer support and operations expenses also include ~~corporate communication costs and~~ professional services fees.

Marketing

Marketing expenses consist primarily of advertising costs used to attract new ~~customers.~~customers, including branding-related expenses. Marketing expenses also include personnel-related expenses associated with the Company’s marketing organization staff, including salaries, benefits and stock-based compensation expense, promotions, software subscription services dedicated for use by the Company’s marketing functions, and outside services contracted for marketing purposes.

Technology and Development

Technology and development expenses consist primarily of personnel-related expenses for employees involved in the research, design, development, and maintenance of both new and existing products and services, , including salaries, benefits, ~~and~~ stock-based compensation ~~expense.~~expense, and legal fees. Technology and development expenses also include professional services fees and costs for software subscription services, dedicated for use by the Company’s technology and development ~~teams.~~teams, as well as other company-wide technology tools. Technology and development expenses also include product and engineering teams used to support the development of both internal infrastructure and internal-use software, to the extent such costs do not qualify for capitalization.

We believe delivering new functionality is critical to attract new customers and expand our relationship with existing customers. We expect to continue to make investments to expand our solutions in order to enhance our customers’ experience and satisfaction, and to attract new customers. We expect our technology and development expenses to increase in absolute dollars, but they may fluctuate as a percentage of total revenue from period to period as we invest in and expand our technology and development team to develop new solutions and enhancements to existing solutions.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses for the Company’s finance, legal, corporate and business development, human resources, facilities, ~~and~~ administrative personnel, and other leadership functions, including salaries, benefits, and stock-based compensation expense. General and administrative expenses also include professional services fees, software subscriptions, facilities, indirect taxes, and other corporate expenses, including acquisition and integration expenses.

~~As a result~~ Such expenses primarily include external legal, accounting, valuation, and due diligence costs, advisory and other professional services fees necessary to integrate acquired businesses. See Note 5. Business Combinations in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the closing of our IPO, we have incurred and expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listedthis Quarterly Report on ~~a national securities exchange, costs related to compliance and reporting obligations, and increased expenses~~Form 10-Q for insurance, investor relations, and professional services. Excluding the $6.9 million impact of the September 2021 donation of our common stock, as well as any future donations of our common stock pursuant to our Pledge 1% commitment, we expect that our general and administrative expenses will increase as our business grows but will decrease as a percentage of our revenue over time.further details.

Depreciation and Amortization

Depreciation and amortization expense includes depreciation on property and equipment and leasehold improvements, as well as the amortization of internal-use software costs and amortization of intangible assets.

Interest Income

Interest income consists primarily of interest income earned on our cash and cash equivalents.

Interest Expense

Interest expense consists primarily of the interest expense on our borrowings.

Other Income (Expense), net

Other income (expense), net, primarily consists of foreign exchange gains and losses.

Provision for Income Taxes

Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and state income taxes in the United States. We maintain a full valuation allowance for U.S. deferred tax assets, which includes net operating loss carryforwards. We expect to maintain this full valuation allowance in the U.S. for the foreseeable future as it is more likely than not that the assets will not be realized based on our history of losses.

Results of Operations

Comparison of the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022

Revenue


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended March 31,				Change
(dollars in thousands)	(dollars in thousands)	2021		2020		Amount		Percent		2021		2020		Amount		Percent		(dollars in thousands)	2023		2022		Amount		Percent
Revenue	Revenue	$	121,244	$	71,790	$	49,454	69	%	$	323,350	$	176,939	$	146,411	83	%	Revenue	$	203,865	$	136,014	$	67,851	50	%

Revenue increased ~~$49.5~~$67.9 million, or ~~69%~~50%, to ~~$121.2~~$203.9 million for the three months ended ~~September 30, 2021.~~March 31, 2023. This increase was primarily driven by growth in send volume, which increased ~~$2.0 billion, or 61%~~40%, to ~~$5.2~~$8.5 billion for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to ~~$3.2~~$6.1 billion for the three months ended ~~September 30, 2020,~~March 31, 2022, reflecting ~~both~~ an increase in active customers ~~as well as increased transaction frequency among our active customers, resulting in an increase~~period over period and continued strength in the ~~average revenue per active customer compared~~retention of existing customers. Rewire contributed approximately 2% to the ~~third quarter in 2020.~~

Revenue increased $146.4 million, or 83%, to $323.4 million for the nine months ended September 30, 2021, compared to $176.9 million for the nine months ended September 30, 2020. This increase was driven primarily by theyear over year revenue growth in send volume, which increased $6.1 billion, or 72%, to $14.5 billion for the nine months ended September 30, 2021, compared to $8.4 billion for the nine months ended September 30, 2020, along with more average revenue per active customer.rate.

Transaction Expenses


		Three Months Ended September 30,						Change				Nine Months Ended September 30,						Change					Three Months Ended March 31,						Change
(dollars in thousands)	(dollars in thousands)	2021			2020			Amount		Percent		2021			2020			Amount		Percent		(dollars in thousands)	2023			2022			Amount		Percent
Transaction expenses	Transaction expenses	$	47,560		$	28,046		$	19,514	70	%	$	135,175		$	74,256		$	60,919	82	%	Transaction expenses	$	74,066		$	56,263		$	17,803	32	%
Percentage of total revenue	Percentage of total revenue	39		%	39		%					42		%	42		%					Percentage of total revenue	36		%	41		%

Transaction expenses increased ~~$19.5~~$17.8 million, or ~~70%~~32%, to ~~$47.6~~$74.1 million for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to ~~$28.0~~$56.3 million, for the three months ended ~~September 30, 2020.~~March 31, 2022. The increase was primarily due to a ~~$15.7~~$17.0 million increase in direct costs associated with processing a higher volume of our customers’ remittance transactions and the disbursement of our customers’ funds to their recipients ~~a $3.0 million increase in fraud and other losses largely driven by growth in new customers and send volume,~~ and a ~~$0.8~~$1.5 million increase in other transaction expenses, primarily related to software and tools that support our compliance and risk operations. These increases were partially offset by a $0.7 million decrease in our provision for fraud and other losses.

As a percentage of revenue, transaction expenses ~~remained flat at 39%~~declined to 36% for the three months ended ~~September 30, 2021~~March 31, 2023 as compared to 41% for the three months ended ~~September 30, 2020.~~

~~Transaction expenses increased $60.9 million, or 82%, to~~ ~~$135.2 million~~ ~~for the nine months ended September 30, 2021, compared to $74.3 million, for the nine months ended September 30, 2020. The increase was~~March 31, 2022, primarily due to better economics with partners as we are able to secure better terms with our payment and disbursement partners as a ~~$49.2 million increase~~result of increasing scale, and also due to improvements in ~~direct costs associated with processing a higher volume of~~ our ~~customers’ remittance transactions and the disbursement of our customers’ funds~~ability to ~~their recipients, a $9.1 million increase in~~prevent fraud and other losses largely driven by growth in new customers and send volume, and a $2.6 million increase in other transaction expenses, primarily software and tools that support our compliance and risk operations.

~~As a percentage of revenue, transaction expenses remained flat at 42% for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.~~losses.

Customer Support and Operations Expenses


		Three Months Ended September 30,						Change				Nine Months Ended September 30,						Change					Three Months Ended March 31,						Change
(dollars in thousands)	(dollars in thousands)	2021			2020			Amount		Percent		2021			2020			Amount		Percent		(dollars in thousands)	2023			2022			Amount		Percent
Customer support and operations	Customer support and operations	$	12,005		$	7,632		$	4,373	57	%	$	32,435		$	17,795		$	14,640	82	%	Customer support and operations	$	19,931		$	13,870		$	6,061	44	%
Percentage of total revenue	Percentage of total revenue	10		%	11		%					10		%	10		%					Percentage of total revenue	10		%	10		%

Customer support and operations expenses increased ~~$4.4~~$6.1 million, or ~~57%~~44%, for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to the three months ended ~~September 30, 2020.~~March 31, 2022. The increase was primarily driven by a ~~$1.9~~$2.7 million increase in third-party customer support costs, a $2.1 million increase in internal personnel costs at our sites in the Philippines, Nicaragua, Ireland, and ~~Nicaragua~~Israel that support customer operations, and a ~~$1.8 million increase in third-party customer support costs, a $0.6~~$1.3 million increase in software and telephony costs as we supported ~~more~~an increased volume of active ~~customers, and a $0.1 million increase in other operating expenses.~~customers.

Marketing expenses increased ~~$11.5~~$3.5 million, or ~~61%~~9%, for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to the three months ended ~~September 30, 2020~~March 31, 2022, due primarily to an increase of ~~$9.5~~$3.5 million in personnel-related costs driven by a 47% increase in marketing headcount compared to the same period in 2022, and inclusive of a $2.0 million increase in stock-based compensation expense. Contributing to the increase in our marketing headcount expense is the acquisition of Rewire.

Technology and Development Expenses

Technology and development expenses increased ~~$7.7~~$25.8 million, or ~~75%~~109% for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to the three months ended ~~September 30, 2020.~~March 31, 2022. The increase was driven by ~~$4.4~~$23.0 million in personnel-related expenses resulting from a ~~35%~~58% increase in headcount compared to the same period in ~~2020,~~2022, as ~~well as~~part of our continued investment in our technology platform, and included a ~~$1.2~~$12.6 million increase in stock-based compensation expense. The increase in technology and development expense was also driven by a ~~$1.4~~$1.9 million increase in software costs for ~~employee tools and~~ cloud services ~~due~~ to ~~growth~~support incremental transaction volume, and $0.9 million in ~~headcount and volume of transactions, $0.3 million higher~~other costs, including professional fees and ~~$0.4 million higher~~other employee ~~related expenses.~~costs. Contributing to the increase in our technology and development headcount expense is the acquisition of Rewire.

General and Administrative Expenses

Three Months Ended September 30, Change Nine Months Ended September 30, Change
(dollars in thousands) 2021 2020 Amount Percent 2021 2020 Amount Percent
General and administrative $ 24,539 $ 7,667 $ 16,872 220 % $ 47,429 $ 22,008 $ 25,421 116 %
Percentage of total revenue 20 % 11 % 15 % 12 %


	Three Months Ended March 31,						Change
(dollars in thousands)	2023			2022			Amount		Percent
General and administrative	$	41,408		$	23,342		$	18,066	77	%
Percentage of total revenue	20		%	17		%

General and administrative expenses increased ~~$16.9~~$18.1 million, or ~~220%~~77%, for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to the three months ended ~~September 30, 2020.~~March 31, 2022. This increase was primarily driven by ~~a $6.9~~$9.6 million ~~donation of common stock~~ in ~~connection with our Pledge 1% commitment. In addition,~~ personnel-related costs ~~increased by $3.2 million, primarily driven by~~due to a ~~63%~~53% increase in ~~the~~ general and administrative headcount compared to the same period in ~~the prior year, as well as~~2022 and inclusive of a ~~$1.9~~$5.0 million increase in stock-based compensation expense. ~~Included within the stock based compensation expense for the three months ended September 30, 2021is approximately $1.1 million~~We also experienced an increase in other operating expenses, primarily related to the ~~recognition~~growth of ~~expense associated with restricted stock units with performance conditions that were met upon IPO.~~the business as well as public company costs, including the company-wide implementation of our first year Sarbanes-Oxley Act of 2022 (“SOX”) as a public company. The largest components of this increase included a $2.5 million increase in ~~general and administrative expenses was also due to~~indirect taxes, a ~~$2.8~~$2.1 million increase in professional ~~regulatory and corporate~~ fees, ~~to support the IPO and ongoing public company~~a $1.1 million increase in facilities costs, a $1.0 million increase in employee-related ~~expenses due to increased recruiting and travel~~ costs, and a ~~$1.1~~$0.6 million net increase toin software and other operating ~~expense.~~costs. Additionally, we incurred approximately $1.2 million in expenses related to the acquisition and integration of Rewire. Contributing to the increase in our general and administrative expenses in the quarter were additional headcount, employee-related, and facility costs as a result of the acquisition of Rewire.

As a ~~percent~~percentage of revenue, general and administrative expenses increased to 20% for the three months ended ~~September 30, 2021,~~March 31, 2023, from ~~11%~~17% for the three months ended ~~September~~ ~~30, 2020,~~March 31, 2022, due ~~primarily~~ to ~~the donation of common stock and costs related to the IPO.~~

Depreciation and Amortization

Depreciation and amortization increased ~~$0.3~~$1.5 million, or ~~32%~~100%, ~~for~~for the three months ended ~~September 30, 2021,~~March 31, 2023, compared to the three months ended ~~September~~ ~~30, 2020.~~March 31, 2022. This increase is ~~mostly due to an increase~~primarily driven by the amortization of acquired intangible assets, as part of the acquisition of Rewire in ~~depreciation for internally developed software, computers, and leasehold improvements.~~the first quarter of 2023.

~~Depreciation and amortization~~Interest Income


	Three Months Ended March 31,				Change
(dollars in thousands)	2023		2022		Amount		Percent
Interest income	$	2,024	$	36	$	1,988	nm*
*not meaningful

Interest ~~Income~~Expense

Three Months Ended September 30, Change Nine Months Ended September 30, Change
(dollars in thousands) 2021 2020 Amount Percent 2021 2020 Amount Percent
Interest income $ 82 $ 7 $ 75 nm $ 92 $ 181 $ (89) (49) %
nm = not meaningful


	Three Months Ended March 31,				Change
(dollars in thousands)	2023		2022		Amount		Percent
Interest expense	$	(389)	$	(313)	$	(76)	24	%

~~Interest~~Other (expense) income, ~~decreased by an immaterial amount for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020.~~net

~~Interest Expense~~


	Three Months Ended March 31,				Change
(dollars in thousands)	2023		2022		Amount		Percent
Other (expense) income, net	$	(1,511)	$	669	$	(2,180)	(326)	%

~~Other Income (Expense), Net~~

Three Months Ended September 30, Change Nine Months Ended September 30, Change
(dollars in thousands) 2021 2020 Amount Percent 2021 2020 Amount Percent
Other income (expense), net $ 396 $ (241) $ 637 (264) % $ 3,044 $ (1,737) $ 4,781 (275) %

Provision for Income Taxes

•although depreciation and amortization are ~~non-cash~~noncash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments;

•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•Adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us;

•Adjusted EBITDA does not reflect the effect of gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency;

•Adjusted EBITDA excludes ~~non-cash~~noncash charges associated with the donation of our common stock in connection with our Pledge 1% commitment, which is recorded in general and administrative ~~expense;~~expenses;

•Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;

•Adjusted EBITDA excludes certain transaction costs, primarily acquisition and integration expenses related to the Rewire acquisition. Transaction costs primarily include external legal, accounting, valuation, and due diligence costs, advisory and other professional services fees necessary to integrate acquired businesses, and the change in the fair value of the holdback liability as part of the acquisition of Rewire; and

•other companies, including companies in our industry, may calculate Adjusted EBITDA differently from how we calculate this measure or not at all, which reduces its usefulness as a comparative measure.

Sources of Liquidity and Material Future Cash Requirements

Operating Activities

Our main sources of operating cash are transaction fees charged to customers and foreign exchange spreads on transactions. Our primary uses of cash from operating activities have been for advertising expenses used to attract new customers, transaction expenses that include fees paid to payment processors and disbursement partners, personnel-related expenses, technology, and ~~analytics, and~~ other general corporate expenditures.

Net cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense, depreciation and amortization, amortization of operating lease right-of-use assets, and Our changes in operating ~~assets~~cash flows are heavily impacted by the timing of customer transactions and, in particular, the day of the week that the quarter end falls on, including holidays and long weekends. For example we generally have higher prefunding amounts if the quarter closes on a weekend or in advance of a long weekend, such as a holiday, which creates variability in customer transaction-related balances period over period and can reduce our cash position at a particular point in time. These balances within our Condensed Consolidated Statements of Cash Flows include disbursement prefunding, customer funds receivable, customer liabilities, ~~during each period.~~book overdrafts, and disbursement postfunding liabilities, which are included within the line item ‘Accrued expenses and other liabilities’.

Investing Activities

Financing Activities

Cash ~~provided by~~used in financing activities ~~consistent~~consists primarily of ~~proceeds from our IPO and concurrent private placement, as well as previous issuances of redeemable convertible preferred stock, and~~ proceeds from the exercise of stock ~~options. Cash~~options, offset by the repayment of assumed indebtedness from the acquisition of Rewire.

~~million of offering costs not yet paid as of September 30, 2021. These proceeds were~~ partially offset by repayments of our Revolving Credit Facility borrowings of $80.0 million and payments of debt issuance costs of $1.0 million. Other financing sources in the nine months ended September 30, 2021 included proceeds from the exercise of stock options of ~~$7.5 million, the repayment of a non-recourse promissory note of $3.1 million, and the issuance of Series F redeemable convertible preferred stock, net of issuance costs of $2.9~~$4.8 million.

•On February 19, 2023, we entered into a lease for an office in Israel. This lease commenced in 2023 and will expire in 2027. Total incremental estimated cash payments that will be made over the course of the lease agreement total approximately $6.0 million. This lease has been recorded in accordance with ASC 842, Leases, on the Company’s Condensed Consolidated Balance Sheets as of March 31, 2023.

During the three months ended March 31, 2023, there were no other material changes outside of the ordinary course of business into the ~~Company’s commitments~~contractual obligations and contingencies ~~during the nine months ended September 30, 2021 from the commitments and contingencies~~as disclosed in ~~“Management's~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, set forth in our ~~Final Prospectus. Also~~Annual Report on Form 10-K for the year ended December 31, 2022. For further discussion of commitments and contingencies, also refer to Note 1414. Commitments and Contingencies to our ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

There have been no material changes, other than as described in Note 2. Basis of Presentation and Summary of Significant Accounting Policies to the Company’s critical accounting policies and estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our ~~Final Prospectus.~~Annual Report on Form 10-K for the year ended December 31, 2022.

See Note 2,2. Basis of Presentation and Summary of Significant Accounting Policies in the notes to the Company’s ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements included in Part I, Item I1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

~~We expect to use the extended transition period for any new or revised accounting standards during the period in which we remain an emerging growth company.~~

•Exposure to foreign currency exchange risk on our cross-border payments if exchange rates fluctuate between initiation of the transaction and transaction disbursement to the recipient. We disburse transactions in multiple foreign currencies, including most notably the Indian rupee, the Mexican peso, and the Philippine peso. In the vast majority of cases, the recipient disbursement occurs within a day of sending, which mitigates foreign currency exchange risk. To enable disbursement in the receive currency, we prefund many disbursement partners one to two business days in advance based on expected send volume. Foreign exchange rate risk due to differences between the timing of transaction initiation and payment varies based on the day of the week and the bank holiday schedule; for example, disbursement prefunding is typically largest before long weekends.

•While the majority of our revenue and expenses are denominated in the U.S. dollar, certain of our international operations are conducted in foreign currencies, a significant portion of which occur in Canada ~~the United Kingdom,~~ and Europe. Changes in the relative value of the U.S. dollar to other currencies may affect revenue and other operating results as expressed in U.S. dollars. In addition, our international subsidiary financial statements are denominated in and operated in currencies outside of the U.S. dollar. As such, the Condensed Consolidated Financial Statements will continue to remain subject to the impact of foreign currency translation, as our international business continues to grow. In periods where other currencies weaken against the U.S. dollar, this can negatively impact our consolidated results which are reported in U.S. dollars.

balance and the customer funds liability balance (and resulting net impact to our net currency position) may be highly variable day to day. In addition, changes in foreign exchange rates may impact customer behavior by altering the timing or volume of transactions sent through our platform. For example, an increase in the value of a send currency against a receive currency may accelerate the timing or amount of remittances.

Evaluation of Disclosure Controls and Procedures

Based on such evaluation, and in consideration of our material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective at the reasonable assurance level. In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the unaudited interim condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

~~Internal Control Over Financial Reporting~~

statements for the period ended December 31, 2020. However, each of the material weaknesses described above, individually and aggregated, could impact the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Changes in Internal Control over Financial Reporting

~~If we fail to retain or grow our customer base, number of payment corridors, or scope of send and receive countries, our business and operating results will be harmed.~~

We partner with third parties to support fulfillment of our service, including risk management, payment processing, customer support, and disbursement, which exposes us to risks outside our direct control.

If we are not able to innovate, improve existing products, and develop new products that achieve market acceptance, our growth, business, operating results, financial condition and future prospects could be materially and adversely affected.

We operate in a highly competitive and evolving market and may be unable to compete successfully against existing and future competitors which employ a variety of existing business models and technologies or new innovations.

cryptocurrency, that could materially impact the financial services industry in the future. The advancement in the development of cryptocurrencies has led to new entrants in the market for remittances and financial services more generally, including companies that have traditionally focused on social networks. Although still in early stages, cryptocurrency usage is growing, and, if we are unable to integrate cryptocurrency or other new financial technologies into our services, we may be unable to compete successfully.

~~Any failure to obtain or maintain necessary money transmission licenses across our global footprint could adversely affect our operations.~~

We have grown rapidly in recent years and have limited operating experience at our current scale of operations. If we are unable to manage our growth effectively, our business and operating results may be materially and adversely affected. We also may not be able to sustain our growth rate in the future.

If we or our industry generally are unable to provide a high-quality and secure customer experience in the various locales in which we operate, our brand could suffer reputational damage and our business results could be harmed.

We transfer large sums of customer funds daily, and are subject to the risk of loss due to errors or fraudulent or illegitimate activities of customers or third parties, any of which could result in financial losses or damage to our reputation and trust in our brand, which would harm our business and financial results.

service providers. For example, incorrect input of payments into a third party processor’s systems has in the past affected the issuance rebates we received from our card services provider, which in turn negatively impacted revenue. In addition, we also are regularly targeted by parties who seek to commit acts of financial fraud, using a variety of techniques, including stolen bank accounts, compromised business email accounts, employee fraud, account takeover, false applications, and check fraud. We are also routinely targeted for illegitimate transactions such as money laundering. These risks are inherently greater for us because our corridors for remittances are generally from developed to developing economies, which have traditionally been highly targeted by bad actors perpetrating fraud or other unwanted activity. The methods used to perpetrate these illegal activities are continually evolving, and we expend considerable resources to monitor and prevent them. Our risk management efforts may not effectively prevent, and we may suffer losses from, these errors and activities and, in some cases, our usual risk allocation agreements and insurance coverages may not be sufficient to cover these losses. We have experienced transaction losses of $7.6 million, or 0.11%, $17.2 million, or 0.14%, and $21.8 million, or 0.15% of total send volume in connection with such errors, fraud, and misconduct in the years ended December 31, 2019 and December 31, 2020 and in the nine month period ended September 30, 2021, respectively. We expect that losses of similar magnitude may occur again in the future. If any of these errors or illegitimate or fraudulent activities are significant, we may be subject to regulatory enforcement actions, suffer significant losses or reputational harm and our business, operating results, and financial condition could be adversely affected.

~~We have a history of operating losses and there is no assurance that our business will become profitable or that, if we achieve profitability, we will be able to sustain it.~~

Our recent rapid growth, including growth in our volume of payments, may not be indicative of our future growth. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

•~~introduce our services in new payment corridors and markets, including maintaining existing and obtaining new money transmitter licenses;~~

•~~successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and~~

~~We expect our revenue mix to vary over time, which could affect our gross margin and results of operations.~~

~~Cyberattacks or data security breaches could result in serious harm to our business, reputation and financial condition.~~

We are subject to privacy laws across multiple jurisdictions which are highly complex, overlapping and frequently changing and create compliance challenges that may expose us to substantial costs, liabilities or loss of customer trust. Our actual or perceived failure to comply with these laws could harm our business.

In addition, compliance with inconsistent privacy and cybersecurity laws may restrict our ability to provide products and services to our customers. For additional discussion about the regulatory environment that we operate in, please see our Final Prospectus under the section titled “Business—Regulatory Environment”.

~~Any security or privacy breach of our system could breach our agreements with significant partners that we use to deliver our services and expose us to significant loss.~~

Any significant interruption or failure of our system availability, including failure to successfully implement upgrades or new technologies to our mobile app or website, could adversely affect our business, financial, and operating results.

Public scrutiny of internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current services to our customers, thereby harming our business.

or are developing laws that protect the privacy and security of sensitive and personal information, including, but not limited to, the Gramm-Leach-Bliley Act (“GLBA”), the California Consumer Privacy Act of 2018 (“CCPA”), the California Privacy Rights Act of 2020 (“CPRA”), the United Kingdom’s Data Protection Act 2018 (the “Data Protection Act”), and the European General Data Protection Regulation (“GDPR”).

~~If we are unable to adequately protect or enforce our intellectual property rights, our business, prospects, financial condition, and operating results could be harmed.~~

confidential information could be compromised by disclosure during this type of litigation. Any of the foregoing or any inability to enforce or otherwise defend our IP Rights could have a material adverse effect on our competitive position, business, financial condition, and results of operations.

Assertions by third parties of infringement, misappropriation, or other violations by us of their intellectual property or other proprietary rights could result in significant costs and substantially harm our business and operating results.

by third parties that we have infringed, misappropriated or otherwise violated their intellectual property. Some companies in the digital financial services industry, including some of our competitors, own large numbers of patents, copyrights, trademarks, and trade secrets, which they may use to assert claims against us. Third parties have asserted and may in the future assert claims of infringement, misappropriation, or other violations of intellectual property rights against us. As the number of services and competitors in our market increases and overlaps occur, claims of infringement, misappropriation, and other violations of intellectual property rights may increase. Any claim of infringement, misappropriation, or other violation of intellectual property rights by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management. In addition, an adverse outcome of a dispute may require us to pay substantial damages; cease making, licensing, or using solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to attempt to redesign our services or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements to obtain the right to use necessary technologies or intellectual property rights; and indemnify our disbursement partners and other third parties. Royalty or licensing agreements, if required or desirable, may be unavailable on terms acceptable to us, or at all, and may require significant royalty payments and other expenditures. Any of these events could harm our business, financial condition, and operating results.

~~Our use of open source and third-party technology could impose limitations on our ability to offer our services to customers.~~

~~If we do not or cannot maintain the compatibility of our platform with the most popular mobile devices, desktop browsers, and tablet devices, our revenue and growth prospects may decline.~~

we will be able to do so in the future. While we have multiple API integrations and partner redundancies built into our platform, if we are unable to adapt to the needs of our strategic partners’ platforms, our remittance transaction process may be interrupted or delayed, and our strategic partners may terminate their agreements with us, leading to a loss of access to large numbers of customers at the same time and consequent negative impact on our growth and customer retention.

~~We may not be able to enforce our intellectual property rights throughout the world.~~

Failure to comply with sanctions laws, anti-terrorist financing laws, anti-money laundering laws, and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.

Syria, Iran, and the Crimea region of Ukraine. Given the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our platform false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or are located in a jurisdiction subject to comprehensive sanctions or an embargo by the United States, and such services may not be in compliance with the economic sanctions regulations administered by OFAC.

~~Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results.~~

~~Our platform is susceptible to fraud, and our business, reputation, financial condition and operating results could be harmed as a result.~~

If we are unable to effectively manage our payment and fraud risks, we may be placed on fraud monitoring programs put in place by various payment scheme networks, banking partners, and our business and financial results may be harmed.

Governments and regulators have been and will continue to be pressured to adopt greater protections for consumers which could require us to change our business model and harm our financial and operating results.

Our business is subject to a variety of U.S. and international laws and regulations, many of which are unsettled and still developing, and many of which may contradict one another due to conflicting regulatory goals. Failure to comply with these laws could subject us to regulatory action, claims or otherwise harm our business.

such as ours to develop and implement a risk-based compliance program designed to prevent and identify money laundering schemes, report large cash transactions and suspicious activity, and maintain records, such as records about customers who use our services and other transaction records. Regulatory agencies continue to scrutinize compliance with these obligations, which may require us to revise or expand our compliance program, including the procedures we use to verify the identity of our customers or monitor international and domestic transactions. In addition, existing laws and regulatory requirements may change and become more stringent, such as requiring us to maintain records on a larger number of transactions or verify the identity of our customers in a prescriptive way, which could result in greater costs for compliance.

•~~prohibit, restrict, and/or impose taxes or fees on remittance transactions in, to, or from certain countries or with certain governments, individuals, and entities;~~

•~~impose additional customer identification and customer, agent, subagent due diligence, and vendor management requirements;~~

•limit the types of entities capable of providing remittance services, impose additional licensing or registration requirements on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our agents or their subagents;

•~~limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange;~~

•~~require the principal amount of money originated in a country to be invested in that country or held in a trust until they are paid;~~

•~~limit the number or principal amount of remittances, which may be sent to or from a jurisdiction, whether by an individual, through one agent, or in aggregate;~~

•impose more stringent information technology, cybersecurity, data, and operational security requirements on us or our agents and their subagents, including relating to data transfers and the use of cloud infrastructure;

•~~impose additional risk management and related governance and oversight requirements, including relating to the outsources of services to other group companies or to third parties; and~~

~~Governments may decide to impose restrictions or levy new taxes on money transfers or other digital financial services provided by us, which would harm our financial results and our business.~~

~~We are subject to anti-corruption laws and regulations, and failure to comply with such laws could harm our business.~~

foreign government officials, political parties, or private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage. We have implemented an anti-corruption compliance policy, but we cannot ensure that all of our employees, customers, and agents, as well as those contractors to which we outsource certain of our business operations, will not take actions in violation of our policies or agreements and applicable law, for which we may be ultimately held responsible.

We are subject to regulations that limit the use of customer funds that we hold at any particular point in time and thus subject to additional regulatory requirements that could have a material adverse impact on our business, financial condition, operating results, and cash flows.

~~Failure to comply with global and evolving marketing laws could subject us to claims or otherwise harm our business.~~

~~Use of social media, endorsers, emails, and text messages may adversely impact our reputation or subject us to fines or other penalties.~~

~~If our disbursement partners fail to comply with applicable laws, it could harm our business.~~

From time to time, we may be subject to legal proceedings, disciplinary actions, regulatory disputes, and governmental investigations that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.

results of legal, administrative, and regulatory proceedings cannot be predicted with certainty and determining reserves for pending litigation and other legal, administrative, and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business. Any adverse determination related to legal, administrative, or regulatory proceedings or a settlement agreement could require us to change our technology or our business practices in costly ways, prevent us from offering certain products or services, require us to pay monetary damages, fines, or penalties, or require us to enter into royalty or licensing arrangements, and could adversely affect our operating results and cash flows, harm our reputation, or otherwise negatively impact our business.

~~Any future litigation against us could be costly and time-consuming to defend.~~

We are exposed to the risk of loss or insolvency if our disbursement partners fail to disburse funds according to our instructions or were to become insolvent unexpectedly or funds are disbursed before customer funds are guaranteed to be sufficient .

~~If there is any material change of service terms or loss of coverage in our payment processors and disbursement network, our business could be harmed.~~

business may be harmed. Our payment processors and disbursement partners could choose to terminate or not renew their agreements with us. Payment processors and disbursement partners could reduce the services provided, cease to do business with us, or cease doing business altogether. If these events occur and we are unable to secure alternative providers willing to provide services on more preferable terms, this could lead to our inability to clear our payment instruments or move funds on a global and timely basis as required to settle our obligations. This would negatively impact our revenue as well as our reputation and brand.

~~If our disbursement partners do not provide a positive recipient experience, our business would be harmed.~~

Increases in various types of fees, such as interchange fees, payment scheme fees and disbursement fees, could increase our costs, affect our profitability, cause us to lose customers, or otherwise limit our operations.

~~The loss of one or more key members of our management team, or our failure to attract, integrate, and retain other highly qualified personnel in the future, could harm our business.~~

~~Interruptions or delays in the services provided by critical data centers or internet service providers could impair the delivery of our platform and our business could suffer.~~

the operations of the facilities of AWS and other third-party providers that we use. We therefore depend on our third-party cloud providers’ ability to protect their data centers against damage or interruption from natural disasters, power or telecommunications failures, criminal acts, and similar events. Our operations depend on protecting the cloud infrastructure hosted by such providers by maintaining their respective configuration, architecture, and interconnection specifications, as well as the information stored in these virtual data centers and which third-party internet service providers transmit. We have from time-to-time in the past experienced service disruptions, and we cannot assure you that we will not experience interruptions or delays in our service in the future. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data storage services we use. Although we have disaster recovery plans that utilize multiple data storage locations, any incident affecting their infrastructure that may be caused by fire, flood, severe storm, earthquake, hurricane, cybersecurity attacks, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters, military actions, terrorist attacks, and other similar events beyond our control could negatively affect our platform, including any disruptions in light of increased usage during the COVID-19 pandemic. In the event that AWS’ or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired and data may be compromised. All of the aforementioned risks may be augmented if our or our partners’ business continuity and disaster recovery plans prove to be inadequate. The facilities also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct, all of which could lead to data theft or misappropriation. Any prolonged service disruption affecting our platform for any of the foregoing reasons could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise harm our business. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.

~~Sustained financial market illiquidity, or illiquidity at our partner financial institutions, could harm our business, financial condition, and operating results.~~

•We may be unable to access funds in our investment portfolio, deposit accounts, and clearing accounts on a timely basis to pay transactions and receive settlement funds. Any resulting need to access other sources of liquidity or short-term borrowing would increase our costs. Any delay or inability to pay transactions could harm our business, financial condition, and operating results;

•Our funds are held by us and our disbursement partners, which includes banks, non-bank financial institutions, and aggregators, both in the United States and abroad. During high volume sending periods, a significant portion of our available cash may be held in an account or accounts outside of the United States. Our payment processors, the commercial banks that hold our funds, our disbursement partners, and the financial institutions that hold prefunding accounts for our disbursement partners or our disbursement collateral could fail or experience sustained deterioration in liquidity. This could lead to our inability to move funds on a global and timely basis as required to pay transactions and receive settlement funds; loss of prefunded balances; or a breach in our regulatory capital requirements if we are unable to recover our funds; and

•We maintain cash at commercial banks in the United States in amounts in excess of the Federal Deposit Insurance Corporation limit of $250,000. In the event of a failure at a commercial bank where we maintain our deposits, we may incur a loss to the extent such loss exceeds the insurance limitation.

Future acquisitions, strategic investments, partnerships, collaborations, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results and financial condition.

Remitly Global is a holding company with no operations of its own and manages a network of local subsidiaries, each of which is subject to different local regulations. In the future, we may depend on our subsidiaries to fund our operations and expenses.

flow or limitations on the ability to repatriate funds, whether as a result of currency liquidity restrictions, monetary or exchange controls, regulatory restrictions, or otherwise. For example, certain of our subsidiaries are subject to minimum capital and liquidity requirements as U.S.-regulated entities and/or the jurisdictions where they do business. Such requirements may limit the ability of these regulated subsidiaries to dividend or distribute funds to Remitly Global. Our operating subsidiaries and intermediate holding companies are separate legal entities, and although they are directly or indirectly wholly owned and controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends, or otherwise. To the extent the ability of any of our subsidiaries to distribute dividends or other payments to us is limited in any way, our ability to fund and conduct our business, service our debt, and pay dividends, if any, could be harmed.

~~Expansion into new international markets and payment corridors will expose us to risks associated with handling of additional currencies and compliance with local regulations and law.~~

•~~compliance with international laws and regulations, including data privacy frameworks similar to the GDPR;~~

•compliance with local tax regimes, including potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and international tax laws as they relate to our international operations;

•the uncertainty of protection for intellectual property and other proprietary rights in some countries and practical difficulties of obtaining, maintaining, protecting, and enforcing rights abroad; and

~~A substantial amount of our revenue is derived from remittances to India, the Philippines and Mexico and our business could be significantly affected by any adverse changes in these regions.~~

We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements. If we fail to remediate any material weaknesses or otherwise fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

working to remediate the material weaknesses as efficiently and effectively as possible but expect that full remediation could potentially go beyond December 31, 2021. At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, incur significant costs, and place significant demands on our financial and operational resources.

We have built proprietary financial systems as part of our technology platform. Such systems could become unstable as we grow, bugs could be introduced, and nonperformance, system interruptions and undetected errors could adversely affect our business and financial results.

If one or more of our counterparties, including financial institutions, aggregators, and local cash pick-up institutions where we have cash on deposit, or our lenders and potential hedging counterparties, default on their financial or performance obligations to us or fail, we may incur significant losses.

~~Fluctuations in currency exchange rates could harm our operating results and financial condition.~~

rupee, the Philippine peso or the Mexican peso. Conversely, we have seen decreased money transfer volume if the U.S. dollar weakens against those currencies. We are also exposed to risks relating to fluctuations in currency exchange rates between the date on which a customer initiates a cross-border remittance payment and the date that the remittance recipient receive the funds through our disbursement partners because the foreign exchange rate quoted to the customer is not adjusted for changes between the initiation date and the settlement date. Additionally, with respect to our revenue which is denominated in currencies other than the U.S. dollar, we may be adversely affected if such currencies weakened against the U.S. dollar because it would result in lower levels of reported revenue on our U.S. dollar denominated financial statements.


TABLE OF CONTENTS		Page(s)
Special Note Regarding Forward-Looking Statements		ii

Part I –	Financial Information	1
Item 1.	~~Item 1.~~ Financial Statements	1
	Condensed Consolidated Balance Sheets as of oSf ~~eptember~~ ~~30, 2021~~March 31, 2023 and December 31, ~~2020~~2022	1
	Condensed Consolidated ~~Statement~~s Statements of Operations for the three ~~and~~ ~~nine~~ months ended S e ~~ptember~~March 31, 2023 ~~30, 2021~~ and ~~2020~~2022	2
	Condensed Consolidated ~~Statement~~s Statements of Comprehensive Loss for the thre ~~three~~e months ended March 31, 2023 and ~~nine~~ ~~months ended~~ ~~September~~ ~~30, 2021 and 2020~~2022	3
	Condensed Consolidated Statements of ~~Redeemable Convertible Preferred Stock and~~ Stockholders’ Equity ~~(Deficit)~~ for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2023 and ~~2020~~2022	4
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 31, 2023 ~~30, 2021~~ and ~~2020~~2022	65
	Notes to Condensed Consolidated Financial Statements	76
Item 2.	~~Item 2.~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations	2119
Item 3.	~~Item 3.~~ Quantitative and Qualitative Disclosure s About Market Risk	3629
Item 4.	~~Item 4.~~ Controls and Procedures	3730

Part II –	Other Information	3931
Item 1.	~~Item 1.~~ Legal Proceedings	3931
Item 1A.	~~Item 1A.~~ Risk Factors	3931
Item 2.	~~Item 2.~~ Unregistered Sales of Equity Securities and Use of Proceeds	7731
Item 3.	~~Item 3.~~ Defaults Upon Senior Securities	7831
Item 4.	~~Item 4.~~ Mine Safety Disclosures	7831
Item 5.	~~Item 5.~~ Other Information	7831
Item 6.	~~Item 6. Exhibits~~Exhibit s	7832

Signatures		8033


							March 31,		December 31,
		September 30, 2021		December 31, 2020			2023		2022
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	443,313	$	186,694	Cash and cash equivalents	$	244,159	$	300,635
Disbursement prefunding	Disbursement prefunding	108,770		101,558		Disbursement prefunding	208,228		158,055
Customer funds receivable, net	Customer funds receivable, net	79,243		50,729		Customer funds receivable, net	123,190		191,402

Prepaid expenses and other current assets	Prepaid expenses and other current assets	15,992		6,350		Prepaid expenses and other current assets	31,361		19,327
Total current assets	Total current assets	647,318		345,331		Total current assets	606,938		669,419
Restricted cash	Restricted cash	302		1,381		Restricted cash	498		99
Property and equipment, net	Property and equipment, net	9,225		9,675		Property and equipment, net	12,658		11,546
Operating lease right-of-use assets	Operating lease right-of-use assets	6,052		5,605		Operating lease right-of-use assets	12,954		8,675
Other non-current assets, net		1,972		997
Goodwill						Goodwill	54,989		—
Intangible assets, net						Intangible assets, net	20,285		—
Other noncurrent assets, net						Other noncurrent assets, net	6,863		6,214
Total assets	Total assets	$	664,869	$	362,989	Total assets	$	715,185	$	695,953
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Liabilities and Stockholders’ Equity						Liabilities and Stockholders’ Equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	6,869	$	4,256	Accounts payable	$	2,909	$	6,794
Borrowings		—		80,000

Customer liabilities	Customer liabilities	104,683		54,819		Customer liabilities	106,947		111,075
Short-term debt						Short-term debt	2,490		—
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	57,699		39,742		Accrued expenses and other current liabilities	79,479		87,752
Operating lease liabilities	Operating lease liabilities	3,411		2,959		Operating lease liabilities	5,642		3,521
Total current liabilities	Total current liabilities	172,662		181,776		Total current liabilities	197,467		209,142
Operating lease liabilities, non-current		3,623		4,008
Other non-current liabilities		901		827
Operating lease liabilities, noncurrent						Operating lease liabilities, noncurrent	8,665		5,674

Other noncurrent liabilities						Other noncurrent liabilities	13,632		1,050
Total liabilities	Total liabilities	$	177,186	$	186,611	Total liabilities	$	219,764	$	215,866
Commitments and contingencies (Note 14)		0		0
Redeemable convertible preferred stock, $0.0001 par value per share; 50,000,000 and 132,674,735 shares authorized as of September 30, 2021 and December 31, 2020; zero and 127,082,605 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; liquidation preference of zero and $399,815 as of September 30, 2021 and December 31, 2020, respectively		—		387,707
Stockholders' equity (deficit)
Common stock, $0.0001 par value; 725,000,000 and 190,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 163,765,500 and 24,289,906 shares issued and outstanding, as of September 30, 2021 and December 31, 2020, respectively		16		2
Commitments and Contingencies (Note 14)						Commitments and Contingencies (Note 14)

Stockholders’ equity						Stockholders’ equity
Common stock, $0.0001 par value; 725,000,000 shares authorized as of March 31, 2023 and December 31, 2022 both; 177,733,293 and 173,250,865 shares issued and outstanding, as of March 31, 2023 and December 31, 2022, respectively						Common stock, $0.0001 par value; 725,000,000 shares authorized as of March 31, 2023 and December 31, 2022 both; 177,733,293 and 173,250,865 shares issued and outstanding, as of March 31, 2023 and December 31, 2022, respectively	18		17
Additional paid-in capital	Additional paid-in capital	730,253		8,766		Additional paid-in capital	897,575		854,276
Accumulated other comprehensive income		282		591
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(395)		(743)
Accumulated deficit	Accumulated deficit	(242,868)		(220,688)		Accumulated deficit	(401,777)		(373,463)
Total stockholders' equity (deficit)		487,683		(211,329)
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit)		$	664,869	$	362,989
Total stockholders’ equity						Total stockholders’ equity	495,421		480,087
Total liabilities and stockholders’ equity						Total liabilities and stockholders’ equity	$	715,185	$	695,953


	Three Months Ended September 30, 2021
	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' (Deficit) Equity
	Shares	Amount		Shares	Amount
Balances as of July 1, 2021	127,410,631	$	390,687	26,385,643	$	3	$	17,193	$	575	$	(229,906)	$	(212,135)

Repayment of non-recourse promissory note	—	—		—	—		3,060		—		—		3,060
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering	(127,410,631)	(390,687)		127,410,631	13		390,674		—		—		390,687
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions	—	—		7,581,395	—		305,191		—		—		305,191
Donation of common stock	—	—		181,961	—		6,933		—		—		6,933
Issuance of common stock upon exercise of warrants	—	—		254,014	—		—		—		—		—
Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting of restricted stock units	—	—		1,951,856	—		2,341		—		—		2,341

Stock-based compensation expense	—	—		—	—		4,861		—		—		4,861
Other comprehensive income	—	—		—	—		—		(293)		—		(293)
Net loss	—	—		—	—		—		—		(12,962)		(12,962)
Balances as of September 30, 2021	—	$	—	163,765,500	$	16	$	730,253	$	282	$	(242,868)	$	487,683

	Three Months Ended September 30, 2020
	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount
Balances as of July 1, 2020	117,788,521	$	302,873	23,126,915	$	2	$	4,741	$	(29)	$	(209,254)	$	(204,540)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs	9,294,084	84,834		—	—		—		—		—		—
Issuance of common stock upon exercise of stock options and vesting of early exercised options	—	—		938,220	—		975		—		—		975
Stock-based compensation expense	—	—		—	—		1,329		—		—		1,329
Other comprehensive income	—	—		—	—		—		219		—		219
Net loss	—	—		—	—		—		—		(2,429)		(2,429)
Balances as of September 30, 2020	127,082,605	$	387,707	24,065,135	$	2	$	7,045	$	190	$	(211,683)	$	(204,446)


	Nine Months Ended September 30, 2021
	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' (Deficit) Equity
	Shares	Amount		Shares	Amount
Balances as of January 1, 2021	127,082,605	$	387,707	24,289,906	$	2	$	8,766	$	591	$	(220,688)	$	(211,329)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs	328,026	2,980		—	—		—		—		—		—
Repayment of non-recourse promissory note	—	—		—	—		3,060		—		—		3,060
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering	(127,410,631)	(390,687)		127,410,631	13		390,674		—		—		390,687
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions	—	—		7,581,395	—		305,191		—		—		305,191
Donation of common stock	—	—		181,961	—		6,933		—		—		6,933
Issuance of common stock upon exercise of warrants	—	—		254,014	—		—		—		—		—


Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting restricted stock units	—	—		4,021,834	1		6,374		—		—		6,375
Issuance of common stock in a business combination	—	—		25,759	—		169		—		—		169


Stock-based compensation expense	—	—		—	—		9,086		—		—		9,086
Other comprehensive loss	—	—		—	—		—		(309)		—		(309)
Net loss	—	—		—	—		—		—		(22,180)		(22,180)
Balances as of September 30, 2021	—	$	—	163,765,500	$	16	$	730,253	$	282	$	(242,868)	$	487,683

	Nine Months Ended September 30, 2020
	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount
Balances as of January 1, 2020	117,788,521	$	302,873	22,425,112	$	2	$	1,292	$	34	$	(188,124)	$	(186,796)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs of $167	9,294,084	84,834		—	—		—		—		—		—
Issuance of common stock upon exercise of stock options and vesting of early exercised options	—	—		1,640,023	—		1,901		—		—		1,901
Stock-based compensation expense	—	—		—	—		3,852		—		—		3,852
Other comprehensive loss	—	—		—	—		—		156		—		156
Net loss	—	—		—	—		—		—		(23,559)		(23,559)
Balances as of September 30, 2020	127,082,605	$	387,707	24,065,135	$	2	$	7,045	$	190	$	(211,683)	$	(204,446)


	As of December 31, 2020
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Restricted cash
Certificates of deposit	$	—	$	102	$	—	$	102
Total assets	$	—	$	102	$	—	$	102



	As of September 30,
	2021	2020
Redeemable convertible preferred stock	—	127,082,605
Common stock warrants	—	256,250
Stock options outstanding	24,061,073	19,934,198
RSUs outstanding(1)	1,301,084	—
Shares subject to repurchase	554,973	1,875,822
Total	25,917,130	149,148,875


As of December 31, 2020
(in thousands, except share and per share amounts)
Series	Shares Authorized	Shares Issued and Outstanding	Issuance Price Per Share		Carrying Amount		Aggregate Liquidation Preference
Series Seed	10,199,786	6,446,322	$	0.27	$	1,595	$	1,741
Series Seed Prime	8,780,816	8,643,665	0.30		2,506		2,593
Series A	11,514,347	10,359,546	0.50		5,091		5,180
Series B	14,196,476	14,196,476	0.88		12,374		12,500
Series C	25,146,777	25,146,777	1.70		41,863		42,800
Series D	30,331,802	30,331,802	3.79		109,674		115,000
Series E	22,663,934	22,663,933	5.96		129,770		135,001
Series F	9,840,797	9,294,084	$	9.15	84,834		85,000
Total	132,674,735	127,082,605			$	387,707	$	399,815


	Number of Shares	Weighted-Average Grant-Date Fair Value Per Share
Unvested at January 1, 2021	437,369	$	3.54
Granted	863,715	23.16
Vested	(23,235)	3.54
Cancelled/forfeited	—	—
Unvested at September 30, 2021	1,277,849	$	16.80


		Incorporated by reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date
3.3	Amended and Restated Certificate of Incorporation
3.4	Restated Bylaws
10.1	Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers	S-1/A	333-259167	3.4	September 14, 2021
10.4	2021 Equity Incentive Plan, and forms of award agreements thereunder	S-1/A	333-259167	3.4	September 14, 2021
10.5	2021 Employee Stock Purchase Plan, and forms of subscription agreement thereunder	S-1/A	333-259167	3.4	September 14, 2021
10.7	Amended and Restated Offer Letter, effective as of September 13, 2021 by and between the Registrant and Matthew Oppenheim	S-1/A	333-259167	3.4	September 14, 2021
10.8	Amended and Restated Offer Letter, effective as of September 13, 2021 by and between the Registrant and Joshua H	S-1/A	333-259167	3.4	September 14, 2021
10.9	Amended and Restated Offer Letter, effective as of September 13, 2021 by and between the Registrant and Susanna Morga	S-1/A	333-259167	3.4	September 14, 2021
10.1	Revolving Credit and Guaranty Agreement, dated as of September 13, 2021, among Remitly Global, Inc. and Remitly, Inc., the guarantors party thereto, the lenders and issuing banks party thereto and J.P. Morgan Chase Bank, N.A.	S-1/A	333-259167	10.1	September 14, 2021