Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40822 | |
Entity Registrant Name | Remitly Global, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2301143 | |
Entity Address, Address Line One | 1111 Third Avenue, | |
Entity Address, Address Line Two | Suite 2100 | |
Entity Address, City or Town | Seattle, | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98101 | |
City Area Code | 888 | |
Local Phone Number | 736-4859 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | RELY | |
Security Exchange Name | NASDAQ | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 170,663,803 | |
Entity Central Index Key | 0001782170 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 376,451 | $ 403,262 |
Disbursement prefunding | 155,536 | 119,627 |
Customer funds receivable, net | 114,029 | 67,215 |
Prepaid expenses and other current assets | 20,119 | 17,448 |
Total current assets | 666,135 | 607,552 |
Restricted cash | 81 | 51 |
Property and equipment, net | 10,270 | 9,249 |
Operating lease right-of-use assets | 9,420 | 5,302 |
Other noncurrent assets, net | 4,431 | 3,510 |
Total assets | 690,337 | 625,664 |
Current liabilities | ||
Accounts payable | 8,180 | 1,210 |
Customer liabilities | 104,861 | 70,483 |
Accrued expenses and other current liabilities | 99,573 | 66,683 |
Operating lease liabilities | 3,168 | 3,240 |
Total current liabilities | 215,782 | 141,616 |
Operating lease liabilities, noncurrent | 6,667 | 2,907 |
Other noncurrent liabilities | 1,399 | 813 |
Total liabilities | 223,848 | 145,336 |
Commitments and Contingencies (Note 14) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value; 725,000,000 shares authorized as of September 30, 2022 and December 31, 2021 both; 170,467,139 and 164,239,555 shares issued and outstanding, as of September 30, 2022 and December 31, 2021, respectively | 17 | 16 |
Additional paid-in capital | 822,929 | 739,503 |
Accumulated other comprehensive (loss) income | (2,389) | 253 |
Accumulated deficit | (354,068) | (259,444) |
Total stockholders’ equity | 466,489 | 480,328 |
Total liabilities and stockholders’ equity | $ 690,337 | $ 625,664 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 725,000,000 | 725,000,000 |
Common stock, issued (in shares) | 170,467,139 | 164,239,555 |
Common stock, outstanding (in shares) | 170,467,139 | 164,239,555 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenue | $ 169,259 | $ 121,244 | $ 462,528 | $ 323,350 | |
Costs and expenses | |||||
Marketing | [1] | 43,337 | 30,365 | 127,807 | 82,639 |
Technology and development | [1] | 36,178 | 18,123 | 95,836 | 44,965 |
General and administrative | [1] | 35,504 | 24,539 | 96,355 | 47,429 |
Depreciation and amortization | 1,843 | 1,319 | 4,870 | 3,890 | |
Total costs and expenses | 204,876 | 133,911 | 560,696 | 346,533 | |
Loss from operations | (35,617) | (12,667) | (98,168) | (23,183) | |
Interest income | 1,400 | 82 | 1,875 | 92 | |
Interest expense | (330) | (512) | (975) | (1,048) | |
Other income, net | 1,765 | 396 | 4,121 | 3,044 | |
Loss before provision for income taxes | (32,782) | (12,701) | (93,147) | (21,095) | |
Provision for income taxes | 287 | 261 | 1,477 | 1,085 | |
Net loss attributable to common stockholders | $ (33,069) | $ (12,962) | $ (94,624) | $ (22,180) | |
Net loss per share attributable to common stockholders: | |||||
Basic (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) | |
Diluted (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) | |
Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||
Basic (in shares) | 168,604,378 | 31,641,400 | 166,517,398 | 26,055,903 | |
Diluted (in shares) | 168,604,378 | 31,641,400 | 166,517,398 | 26,055,903 | |
Transaction expenses | |||||
Costs and expenses | |||||
Cost of revenue | [1] | $ 69,872 | $ 47,560 | $ 186,961 | $ 135,175 |
Customer support and operations | |||||
Costs and expenses | |||||
Cost of revenue | [1] | $ 18,142 | $ 12,005 | $ 48,867 | $ 32,435 |
[1]Exclusive of depreciation and amortization, shown separately, above. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (33,069) | $ (12,962) | $ (94,624) | $ (22,180) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (1,375) | (293) | (2,642) | (309) |
Comprehensive loss | $ (34,444) | $ (13,255) | $ (97,266) | $ (22,489) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Stockholders' Equity | |||||
Beginning balance | $ (211,329) | $ 2 | $ 8,766 | $ 591 | $ (220,688) |
Beginning balance (in shares) at Dec. 31, 2020 | 127,082,605 | ||||
Beginning balance at Dec. 31, 2020 | $ 387,707 | ||||
Redeemable Convertible Preferred Stock | |||||
Preferred stock reclassified into stockholders' equity (in shares) | (127,410,631) | ||||
Preferred stock reclassified into stockholders' equity | $ (390,687) | ||||
Issuance of Series F redeemable convertible preferred stock, net of issuance costs (in shares) | 328,026 | ||||
Issuance of Series F redeemable convertible preferred stock, net of issuance costs | $ 2,980 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | ||||
Ending balance at Sep. 30, 2021 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 24,289,906 | ||||
Stockholders' Equity | |||||
Repayment of non-recourse promissory note | 3,060 | ||||
Issuance of common stock (in shares) | 7,581,395 | ||||
Issuance of common stock | 305,191 | 305,191 | |||
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (in shares) | 127,410,631 | ||||
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering | 390,687 | $ 13 | 390,674 | ||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units (in shares) | 4,021,834 | ||||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting restricted stock units | 6,375 | $ 1 | 6,374 | ||
Issuance of common stock (in shares) | 25,759 | ||||
Issuance of common stock | 169 | 169 | |||
Donation of common stock (in shares) | 181,961 | ||||
Donation of common stock | 6,933 | 6,933 | |||
Issuance of common stock upon exercise of warrants (in shares) | 254,014 | ||||
Stock-based compensation expense | 9,086 | 9,086 | |||
Other comprehensive loss | (309) | (309) | |||
Net loss | (22,180) | (22,180) | |||
Ending balance (in shares) at Sep. 30, 2021 | 163,765,500 | ||||
Ending balance at Sep. 30, 2021 | 487,683 | $ 16 | 730,253 | 282 | (242,868) |
Stockholders' Equity | |||||
Beginning balance | $ (212,135) | $ 3 | 17,193 | 575 | (229,906) |
Beginning balance (in shares) at Jun. 30, 2021 | 127,410,631 | ||||
Beginning balance at Jun. 30, 2021 | $ 390,687 | ||||
Redeemable Convertible Preferred Stock | |||||
Preferred stock reclassified into stockholders' equity (in shares) | (127,410,631) | ||||
Preferred stock reclassified into stockholders' equity | $ (390,687) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | ||||
Ending balance at Sep. 30, 2021 | $ 0 | ||||
Beginning balance (in shares) at Jun. 30, 2021 | 26,385,643 | ||||
Stockholders' Equity | |||||
Repayment of non-recourse promissory note | 3,060 | 3,060 | |||
Issuance of common stock (in shares) | 7,581,395 | ||||
Issuance of common stock | 305,191 | 305,191 | |||
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (in shares) | 127,410,631 | ||||
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering | 390,687 | $ 13 | 390,674 | ||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units (in shares) | 1,951,856 | ||||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting restricted stock units | 2,341 | $ 0 | 2,341 | ||
Donation of common stock (in shares) | 181,961 | ||||
Donation of common stock | 6,933 | 6,933 | |||
Issuance of common stock upon exercise of warrants (in shares) | 254,014 | ||||
Stock-based compensation expense | 4,861 | 4,861 | |||
Other comprehensive loss | (293) | (293) | |||
Net loss | (12,962) | (12,962) | |||
Ending balance (in shares) at Sep. 30, 2021 | 163,765,500 | ||||
Ending balance at Sep. 30, 2021 | 487,683 | $ 16 | 730,253 | 282 | (242,868) |
Stockholders' Equity | |||||
Beginning balance | 487,683 | 16 | 730,253 | 282 | (242,868) |
Beginning balance | $ 480,328 | $ 16 | 739,503 | 253 | (259,444) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | ||||
Beginning balance at Dec. 31, 2021 | $ 0 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | ||||
Ending balance at Sep. 30, 2022 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 164,239,555 | ||||
Stockholders' Equity | |||||
Repayment of non-recourse promissory note | 3,060 | ||||
Issuance of common stock in connection with ESPP (in shares) | 379,674 | ||||
Issuance of common stock in connection with ESPP | 3,516 | 3,516 | |||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units (in shares) | 5,670,958 | ||||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting restricted stock units | 8,746 | $ 1 | 8,745 | ||
Donation of common stock (in shares) | 181,961 | ||||
Donation of common stock | 1,972 | 1,972 | |||
Taxes paid related to net share settlement of equity awards (in shares) | (5,009) | ||||
Taxes paid related to net share settlement of equity awards | (55) | (55) | |||
Stock-based compensation expense | 69,248 | 69,248 | |||
Other comprehensive loss | (2,642) | (2,642) | |||
Net loss | (94,624) | (94,624) | |||
Ending balance (in shares) at Sep. 30, 2022 | 170,467,139 | ||||
Ending balance at Sep. 30, 2022 | 466,489 | $ 17 | 822,929 | (2,389) | (354,068) |
Stockholders' Equity | |||||
Beginning balance | $ 467,225 | $ 17 | 789,221 | (1,014) | (320,999) |
Beginning balance (in shares) at Jun. 30, 2022 | 0 | ||||
Beginning balance at Jun. 30, 2022 | $ 0 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | ||||
Ending balance at Sep. 30, 2022 | $ 0 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 167,789,651 | ||||
Stockholders' Equity | |||||
Issuance of common stock in connection with ESPP (in shares) | 177,461 | ||||
Issuance of common stock in connection with ESPP | 1,634 | 1,634 | |||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units (in shares) | 2,320,448 | ||||
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting restricted stock units | 3,914 | 3,914 | |||
Donation of common stock (in shares) | 181,961 | ||||
Donation of common stock | 1,972 | 1,972 | |||
Taxes paid related to net share settlement of equity awards (in shares) | (2,382) | ||||
Taxes paid related to net share settlement of equity awards | (25) | (25) | |||
Stock-based compensation expense | 26,213 | 26,213 | |||
Other comprehensive loss | (1,375) | (1,375) | |||
Net loss | (33,069) | (33,069) | |||
Ending balance (in shares) at Sep. 30, 2022 | 170,467,139 | ||||
Ending balance at Sep. 30, 2022 | 466,489 | $ 17 | 822,929 | (2,389) | (354,068) |
Stockholders' Equity | |||||
Beginning balance | $ 466,489 | $ 17 | $ 822,929 | $ (2,389) | $ (354,068) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (94,624) | $ (22,180) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 4,870 | 3,890 |
Stock-based compensation expense, net | 67,880 | 8,965 |
Donation of common stock | 1,972 | 6,933 |
Other | 268 | 360 |
Changes in operating assets and liabilities: | ||
Disbursement prefunding | (35,909) | (7,212) |
Customer funds receivable | (52,547) | (29,072) |
Prepaid expenses and other assets | (3,355) | (9,491) |
Operating lease right-of-use assets | 2,743 | 2,023 |
Accounts payable | 6,863 | 1,229 |
Customer liabilities | 36,803 | 50,284 |
Accrued expenses and other liabilities | 40,399 | 16,013 |
Operating lease liabilities | (3,152) | (2,317) |
Net cash (used in) provided by operating activities | (27,789) | 19,425 |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,197) | (1,347) |
Capitalized internal-use software costs | (2,444) | (1,941) |
Cash paid for acquisition, net of acquired cash and cash equivalents | (375) | 0 |
Net cash used in investing activities | (5,016) | (3,288) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock upon initial public offering and private placements, net of underwriting discounts and commissions and other offering costs | 0 | 307,094 |
Repayment of non-recourse promissory note | 0 | 3,060 |
Proceeds from issuance of Series F convertible preferred stock, net of issuance costs | 0 | 2,980 |
Proceeds from exercise of stock options | 8,245 | 7,519 |
Payment of debt issuance costs | 0 | (988) |
Repayments of revolving credit facility borrowings, net | 0 | (80,000) |
Taxes paid related to net share settlement of equity awards | (55) | 0 |
Net cash provided by financing activities | 8,190 | 239,665 |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (2,166) | (262) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (26,781) | 255,540 |
Cash, cash equivalents, and restricted cash at beginning of period | 403,313 | 188,075 |
Cash, cash equivalents, and restricted cash at end of period | 376,532 | 443,615 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 690 | 936 |
Cash paid for income taxes | 1,397 | 303 |
Supplemental disclosure of noncash investing and financing activities | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 7,441 | 2,532 |
Vesting of early exercised options | 554 | 263 |
Noncash issuance of common stock in connection with ESPP | 3,516 | 0 |
Stock-based compensation expense capitalized to internal-use software | 1,368 | 0 |
IPO and debt issuance costs incurred but not yet paid | 0 | 2,287 |
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering | 0 | 390,687 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 376,451 | 443,313 |
Restricted Cash and Cash Equivalents | 81 | 302 |
Total cash, cash equivalents and restricted cash | $ 376,532 | $ 443,615 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 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. Remitly is a leading digital financial services provider for immigrants 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 and supporting cross-border transmissions across the globe. Unless otherwise expressly stated or the context otherwise requires, the terms “Remitly” and the “Company” in these notes to the 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 one-to-one basis. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited 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 Annual Report on Form 10-K, for the year ended December 31, 2021. The accompanying unaudited interim 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 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, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other future annual or interim period. Principles of Consolidation The 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 Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the 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. 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. 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 located in India, Philippines and Mexico. 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 three and nine months ended September 30, 2022 and 2021. For the three and nine months ended September 30, 2022 and 2021, no individual customer represented 10% or more of the Company’s total revenue or customer funds receivable. Trade Settlement Liabilities Our trade settlement liability represents the total of book overdrafts and disbursement postfunding liabilities owed to our disbursement partners. Book overdrafts are created when the sum of outstanding checks related to a specific bank account are in excess of funds on deposit for the respective bank account. Disbursement postfunding liabilities are created when the sum of customer transactions related to a specific account held with a disbursement partner are in excess of funds on deposit for the respective account. Book overdrafts and disbursement postfunding liabilities totaled $48.1 million and $18.9 million as of September 30, 2022 and December 31, 2021, respectively, and were classified as ‘Accrued expenses and other current liabilities’ in the Condensed Consolidated Balance Sheets. The Company’s policy is to report the change in book overdrafts and prefunding liabilities as an operating activity in the Consolidated Statements of Cash Flows based on the underlying nature of the transactions. 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 noncurrent 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. Advertising Advertising expenses are charged to operations as incurred and are included as a component of ‘ Marketing Expenses’ within the Condensed Consolidated Statements of Operations. Advertising expenses are used primarily to attract new customers. Advertising expenses totaled $34.6 million and $25.6 million during the three months ended September 30, 2022 and 2021, respectively. Advertising expenses totaled $105.2 million and $70.1 million during the nine months ended September 30, 2022 and 2021, respectively. Business Combinations and Asset Acquisitions The Company evaluates acquisitions to determine if they meet the definition of a business. If the acquisition does meet the definition of a business, it is accounted for as a business combination. For a business combination, assets acquired and liabilities assumed are generally recorded at their fair value at the date of acquisition. Any excess of the fair value of consideration transferred for the business, over the fair values of the identifiable assets acquired and liabilities assumed is recognized as goodwill. Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. In an asset acquisition, the cost of the acquisition, including transaction costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date, and no goodwill is recognized. Transaction costs related to business combinations are expensed as incurred and are included in ‘ General and Administrative Expenses ’ in the Condensed Consolidated Statements of Operations. Acquisition expenses primarily include external legal, accounting, valuation, and due diligence costs, as well as advisory and other professional services fees necessary to integrate acquired businesses. Transaction costs totaled $1.8 million and $2.6 million for the three and nine months ended September 30, 2022. There were no transaction costs incurred for the three and nine months ended September 30, 2021. Such costs are primarily related to our pending acquisition of Rewire, as further discussed in “Management’s Discussion and Analysis” included in Part I, Item 2 within this Quarterly Report on Form 10-Q. Intangible Assets Intangible assets with finite lives primarily consist of licenses acquired through business combinations or asset acquisitions. Intangible assets acquired through business combination are recorded at their respective estimated fair values upon acquisition close. Other intangible assets acquired through asset acquisition are recorded at their respective cost. The Company determines the estimated useful lives for acquired intangible assets based on the expected future cash flows associated with the respective asset. The Company's intangible assets with finite lives are amortized using an economic benefit method, over their estimated useful lives, unless amortizing on a straight-line basis would not be significantly different. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Out-of-Period Adjustment The Condensed Consolidated Financial Statements include an adjustment of $4.4 million to stock-based compensation expense and additional paid-in capital, to correct for an error identified by management during the preparation of the prior quarter’s financial statements for the three months ended June 30, 2022. This adjustment is to reflect the straight-lining of expense over the full service period for graded-vested stock-based compensation awards under ASC 718, and relates to prior annual fiscal periods. Management has determined that this error was not material to the historical financial statements in any individual period or in the aggregate and did not result in the previously issued financial statements being materially misstated. Additionally, although the impact to the three months ended June 30, 2022 was considered material, the impact to full year 2022 expected results is not material. As such, management recorded the correction as an out-of-period adjustment in the three months ended June 30, 2022, as disclosed in our Quarterly Report on Form 10-Q for the three months ended June 30, 2022. Substantially all of the cumulative adjustment was related to stock-based compensation for personnel who support our general and administrative functions and was recorded to general and administrative expenses . Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies during the three months ended September 30, 2022, except as noted below. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements (“ASU”) In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40),Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Under existing U.S. GAAP, there is diversity in practice in accounting for the costs of implementing cloud computing arrangements (“CCA”) that are service contracts. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard also requires the presentation of the amortization of the capitalized implementation costs in the same line item in the Condensed Consolidated Statements of Operations as the fees associated with the hosting arrangement. The new standard is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021 with early adoption permitted. This ASU was adopted on a prospective basis for the fiscal year ended December 31, 2021. The Company assessed the impact of the guidance to its consolidated financial statements for the three and nine months ended September 30, 2021 and concluded that the standard did not have a material impact on its financial statements. See Note 4. for further disclosure of the ongoing impact of ASU 2018-15 to the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2022. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology pursuant to which loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The Condensed Consolidated Statements of Operations would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. The new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year with early adoption permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements. There are new accounting pronouncements issued by the FASB that we have adopted or will adopt, as applicable. We do not believe any of these accounting pronouncements have had, or will have, a material impact on our consolidated financial statements or disclosures. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company’s primary source of revenue is generated from its remittance business. Revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads earned 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. 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, 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, 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 in the Condensed Consolidated Statements of Operations. The Company does not have any capitalized contract acquisition costs. Deferred Revenue The deferred revenue balances from contracts with customers were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Deferred revenue, beginning of the period $ 1,084 $ 1,126 $ 1,212 $ 1,105 Deferred revenue, end of the period 1,122 1,269 1,122 1,269 Change in deferred revenue during the period 38 143 (90) 164 Revenue recognized during the three month periods ended September 30, 2022 and 2021 from amounts included in deferred revenue at the beginning of the period were $0.4 million and $0.3 million, respectively. Revenue recognized during the nine month periods ended September 30, 2022 and 2021 from amounts included in deferred revenue at the beginning of the period were $0.6 million and $0.3 million, respectively. Deferred revenue represents amounts received from customers for which the performance obligations are not yet fulfilled. Deferred revenue is primarily included within ‘ Accrued expenses and other current liabilities’ on the 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 ’ within the Condensed Consolidated Statements of Operations. In addition, referral credits given to a referrer are classified as marketing expenses. During the three months ended September 30, 2022 and 2021, payments made to customers resulted in reductions to revenue of $6.7 million and $4.3 million, respectively, and charges to sales and marketing expense of $5.2 million and $2.6 million, respectively. During the nine months ended September 30, 2022 and 2021, payments made to customers resulted in reductions to revenue of $17.5 million and $13.4 million, respectively, and charges to sales and marketing expense of $13.8 million and $8.4 million, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following: September 30, December 31, (in thousands) 2022 2021 Capitalized internal-use software $ 12,682 $ 9,022 Computer and office equipment 5,825 4,700 Furniture and fixtures 1,982 1,445 Leasehold improvements 6,656 6,655 Projects in Process 17 533 27,162 22,355 Less: Accumulated depreciation and amortization (16,892) (13,106) Property and equipment, net $ 10,270 $ 9,249 Depreciation and amortization expense related to property and equipment was $1.9 million and $1.3 million for the three months ended September 30, 2022 and 2021, respectively Depreciation and amortization expense related to property and equipment was $4.9 million and $3.9 million for the nine months ended September 30, 2022 and 2021, respectively. Capitalized Internal-Use Software Costs There has been no impairment of previously capitalized costs during the three and nine months ended September 30, 2022 and 2021. Three months ended September 30, 2022 and 2021 The Company capitalized $1.2 million and $0.5 million for internal-use software costs for three month periods ended September 30, 2022 and 2021, respectively. The Company capitalized $0.5 million of stock-based compensation costs to internal-use software during the three month period ended September 30, 2022. The Company capitalized inconsequential amounts of stock-based compensation costs to internal-use software during the three months ended September 30, 2021. The Company recorded amortization expense of $1.1 million and $0.6 million for the three months ended September 30, 2022 and 2021, respectively. Nine months ended September 30, 2022 and 2021 The Company capitalized $3.8 million and $2.0 million for internal-use software costs during the nine months ended September 30, 2022 and 2021, respectively. The Company capitalized $1.4 million of stock-based compensation costs to internal-use software during the nine months ended September 30, 2022. The Company capitalized inconsequential amounts of stock-based compensation costs to internal-use software during the nine months ended September 30, 2021. The Company recorded amortization expense of $2.5 million a nd $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. Capitalized Cloud Computing Arrangements The Company capitalized $0.4 million and $1.1 million related to the implementation of cloud computing arrangements and recorded amortization expense of $0.2 million and $0.4 million during the three and nine months ended September 30, 2022. As of September 30, 2022, capitalized costs, net of accumulated amortization, were approximately $1.6 million, of which $0.7 million was recorded within ‘ Prepaid expenses and other current assets’ and $0.9 million was recorded within ‘ Other noncurrent assets, net ’ on the Company’s Condensed Consolidated Balance Sheets, which is inclusive of a $0.5 million reclassification from ‘ Other noncurrent assets, net’ to ‘ Prepaid expenses and other current assets’ for the nine months ended September 30, 2022, in-line with the respective underlying useful life of the capitalized costs. Amortization expense related to cloud computing arrangements for the three and nine months ended September 30, 2022 was as follows: Three Months Ended Nine Months Ended (in thousands) September 30, 2022 Technology and development $ 166 $ 413 General and administrative 4 19 Total amortization $ 170 $ 432 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements There were no financial assets and liabilities that were measured at fair value as of September 30, 2022 and December 31, 2021. We previously invested approximately $80.0 million of our cash and 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 the time of purchase. Upon maturity, in the three months ended June 30, 2022, we re-invested approximately $50.0 million, into a new term deposit, that was subsequently liquidated during the nine months ended September 30, 2022. The carrying values of certain financial instruments, including disbursement prefunding, customer funds receivable, accounts payable, accrued expenses and other current liabilities, customer liabilities, and borrowings approximate their respective fair values due to their relative short maturities. If these financial instruments were measured at fair value in the financial statements, they would be classified as Level 2. Other than as described above, there were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2021. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Secured Revolving Credit Facility New Revolving Credit Facility On September 13, 2021, Remitly Global, Inc. and Remitly, Inc., a wholly owned subsidiary of Remitly Global, Inc., as co-borrowers, entered into a credit agreement (the “New Revolving Credit Facility”) with certain lenders and JPMorgan Chase Bank, N.A. acting as administrative agent and collateral agent, that provides for revolving commitments of $250.0 million (including a $60.0 million letter of credit sub-facility) and terminated its then-existing 2020 Credit Agreement (as defined below). Proceeds under the New Revolving Credit Facility are available for working capital and general corporate purposes. As part of the refinancing, the Company performed a debt modification analysis, utilizing the borrowing capacity test within ASC 470-50, Debt — Modification and Extinguishment , on a lender-by-lender basis, resulting in the capitalization of $1.4 million of new debt issuance costs incurred in connection with the New Revolving Credit Facility during the third quarter of 2021 . Such amounts were capitalized and recorded within ‘ Other noncurrent assets, net’ on the Condensed Consolidated Balance Sheets, and will be amortized to interest expense over the term of the New Revolving Credit Facility. The Company previously had $0.5 million of unamortized debt issuance costs associated with its existing Revolving Credit Facility. As a result of the debt modification analysis, the Company continues to amortize $0.4 million of unamortized debt issuance costs over the term of the New Revolving Credit Facility. The remaining $0.1 million was expensed as a debt extinguishment cost within interest expense in the Condensed Consolidated Statements of Operations during the third quarter of 2021. The New Revolving Credit Facility was used to refinance its existing 2020 Credit Agreement. The New Revolving Credit Facility has a maturity date of September 13, 2026. Borrowings under the New Revolving Credit Facility accrue interest at a floating rate per annum equal to, at the Company’s option, (1) the Alternate Base Rate (defined in the New Revolving Credit Facility as the rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect for such day plus 0.50% and (c) the Adjusted LIBO Rate plus 1.00%, subject to a floor of 1.00% plus 0.50% or (2) the Adjusted LIBO Rate (subject to a floor of 0.00%) plus 1.50%. Such interest is payable (a) with respect to Alternate Base Rate loans, the last day of each March, June, September and December and (b) with respect to Adjusted LIBO Rate loans, at the end of each applicable interest period, but in no event less frequently than every three months. In addition, an unused commitment fee, which accrues at a rate per annum equal to 0.25% of the unused portion of the revolving commitments, is payable on the last day of each March, June, September and December. 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, 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 September 30, 2022 and December 31, 2021 . The obligations under the New Revolving Credit Facility are guaranteed by the 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. As of September 30, 2022 and December 31, 2021, the Company had no outstanding borrowings under the New Revolving Credit Facility. As of September 30, 2022 and December 31, 2021, the Company had $19.2 million and $18.9 million, respectively, in issued, but undrawn, standby letters of credit. As of September 30, 2022 and December 31, 2021, the Company had unused borrowing capacity of $230.8 million and $231.1 million, respectively, under the New Revolving Credit Facility. 2020 Credit Agreement Since 2013, the Company had access to a variable rate credit facility. In November 2020, Remitly Global, Inc. and Remitly, Inc., a wholly owned subsidiary of Remitly Global, Inc., as borrower, further modified its then-existing credit agreement (the “2020 Credit Agreement”). Following such modification, the 2020 Credit Agreement provided Remitly, Inc. with access up to $150.0 million in revolving credit facility borrowings (including a $30.0 million letter of credit sub-facility) with a maturity date of November 16, 2023. As noted above, in September 2021, the New Revolving Credit Facility was used to refinance the 2020 Credit Agreement. As a result of the refinancing, the 2020 Credit Agreement was terminated and all amounts outstanding, including any accrued interest, were repaid in full. Borrowings under the 2020 Credit Agreement were subject to mandatory repayment within 20 business days in an amount necessary to reduce the borrowings, in the aggregate, to an amount less than the Company’s customer funds account maintained with the lender. Interest on borrowings under the 2020 Credit Agreement accrued at a floating rate per annum equal to (i) ABR (defined in the 2020 Credit Agreement as the rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) 3.25% and (c) the Federal Funds Effective Rate in effect for such day plus 0.50% plus (ii) 1.0%. In addition, an unused revolving line facility fee accrued at a floating rate per annum equal to 0.40% of the unused portion of the line, payable monthly. The 2020 Credit Agreement contained customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness, pay dividends, incur encumbrances, make distributions to holders of its capital stock, make investments or engage in transactions with affiliates. Defined events of default included the occurrence of a Material Adverse Effect (as defined in the 2020 Credit Agreement) on the business or financial condition of the Company. Financial covenants included (1) a requirement to maintain a minimum Adjusted Quick Ratio of 1.50:1.00, which was tested monthly and (2) a requirement to maintain minimum trailing twelve month Consolidated Adjusted EBITDA (as defined in the 2020 Credit Agreement), which was tested quarterly. |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the 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. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share amounts) 2022 2021 2022 2021 Numerator: Net loss $ (33,069) $ (12,962) $ (94,624) $ (22,180) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders: Basic and diluted 168,604,378 31,641,400 166,517,398 26,055,903 Net loss per share attributable to common stockholders: Basic and diluted $ (0.20) $ (0.41) $ (0.57) $ (0.85) 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 antidilutive: As of September 30, 2022 2021 Stock options outstanding 18,364,196 24,061,073 RSUs outstanding (1) 19,930,996 1,301,084 ESPP 1,396,853 — Shares subject to repurchase 205,727 554,973 Total 39,897,772 25,917,130 |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Common Stock | Common StockAs of September 30, 2022, 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 one 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, 2022 and September 30, 2021, 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. The Company donated 181,961 shares of its common stock to Remitly Philanthropy Fund on September 28, 2022 and 2021, respectively, 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 $2.0 million and $6.9 million to ‘ General and Administrative Expenses ’ within the Condensed Consolidated Statements of Operations based on the closing price of its common stock as reported on the Nasdaq Global Select Market (the “NASDAQ”) on September 28, 2022 and 2021, respectively. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock Prior to the Company’s IPO, the Company had 127,410,631 shares of redeemable convertible preferred stock outstanding. Upon completion of the IPO, all shares of redeemable convertible preferred stock were automatically converted into an equivalent number of shares of common stock on a one-to-one basis and their carrying value of $390.7 million was reclassified into stockholders’ equity. In addition, 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. As of September 30, 2022 and December 31, 2021, there wer e no |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2011, the Company adopted the Equity Incentive Plan (the “2011 Plan”), as amended, which provided for the issuance of up to 43,899,677 incentive stock options, nonqualified stock options, restricted common stock, RSUs and stock appreciation rights to employees, directors, officers, and consultants of the Company. In September 2021, the Company adopted the Remitly Global, Inc. 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 issuance of incentive stock options, nonqualified stock options, restricted common stock, stock appreciation rights, RSUs, 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 grants, including exercise price, number of equity awards granted, and vesting schedule. The 2021 Plan provided for the initial 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 initially reserved for issuance under the 2021 Plan. Beginning in January 2022, the number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each year 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 January 2022, there was an increase in the shares reserved for issuance under the 2021 Plan, in accordance with the automatic increase provision. In addition, in September 2021, the Company adopted the Remitly Global, Inc. 2021 ESPP (the “ESPP”) to enable eligible employees to purchase shares of common stock with accumulated payroll deductions at a discount. The ESPP provided for the initial issuance of up to 3,500,000 shares of common stock. Beginning in January 2022, the number of shares reserved for issuance and sale under the ESPP will increase automatically on January 1 of each year 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. In January 2022, there was an increase in the shares reserved for issuance under the 2021 ESPP Plan, in accordance with the automatic increase provision. As of September 30, 2022, 14,733,269 equity incentive awards remain available for issuance under the 2021 Plan and 4,762,721 shares of common stock remain available for issuance under the ESPP. 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 nonemployees, 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, options 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 months ended September 30, 2022: 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, 2022 23,386,942 $ 3.70 7.66 $ 395,676 Granted 166,113 11.15 Exercised (3,776,392) 2.18 30,850 Forfeited (1,412,467) 5.12 Balances as of September 30, 2022 18,364,196 3.98 7.03 133,458 Vested and exercisable as of September 30, 2022 10,653,383 2.37 6.19 93,049 Vested and expected to vest as of September 30, 2022 18,524,923 $ 3.97 7.04 $ 134,689 _________________ (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 stock option granted during the three and nine months ended September 30, 2022 and 2021 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, 2022 2021 2022 2021 Risk-free interest rates 2.86% 0.74% to 1.10% 2.86% 0.32% to 1.19% Expected term 6.1 years 5.0 to 6.5 years 6.1 years 3.5 to 6.8 years Volatility 64.0% 49.3% to 50.5 % 64.0% 37.8% to 50.5 % 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 awards 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, 2022 and 2021 was $6.78 and $15.31, respectively. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2022 and 2021 was $6.78 and $5.22, respectively. The aggregate grant-date fair value of options vested for the three months ended September 30, 2022 and 2021 was $2.5 million and $2.1 million, respectively. The aggregate grant-date fair value of options vested for the nine months ended September 30, 2022 and 2021 was $9.6 million and $5.4 million, respectively. Restricted Stock Units Prior to the IPO, the Company granted performance-based RSUs (“PRSUs”) to employees and directors that contained 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 is being 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, 2022 was as follows: Number of Shares Weighted-Average Grant-Date Fair Value Per Share Unvested at January 1, 2022 3,372,585 $ 24.83 Granted 19,393,131 10.66 Vested (1,770,540) 13.64 Cancelled/forfeited (1,064,180) 17.49 Unvested at September 30, 2022 19,930,996 12.43 In addition, during the three months ended March 31, 2022, as a result of the expiration of the lock-up agreement related to its IPO, the Company issued 124,026 shares of common stock subject to RSUs that were vested as of December 31, 2021, but not yet settled. The weighted-average grant date fair value of RSUs, including PRSUs, granted during the nine months ended September 30, 2022 and 2021 was $10.66 and $23.16, respectively. The aggregate grant-date fair value of RSUs, including PRSUs, vested for the nine months ended September 30, 2022 and 2021 was $24.2 million and $0.1 million, respectively. Employee Stock Purchase Plan The ESPP provides for offering periods during which eligible employees can participate in the ESPP and be granted the right to purchase shares. Except for the first offering period, which commenced on September 22, 2021, offering periods shall commence on each subsequent March 1 and September 1, with each offering period consisting of four six-month purchase periods, for a total of a 24-month offering period. No offering periods may last longer than 27 months. Except for the first offering period, the grant date for accounting purposes is generally the first date of each offering period and expense is recognized over the requisite service period, which is considered to be the 24-month offering period. For the first offering period, the grant date for awards under the ESPP was met in October 2021, upon mutual agreement of terms and conditions between the Company and participants of the ESPP. The offering period that commenced on September 22, 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 US 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 will be recognized over the new offering period, which is deemed to be the requisite service period. In addition, a subsequent 24-month offering commenced on September 1, 2022. Eligible employees can contribute up to 15% of their eligible compensation, subject to limitation as provided for in the ESPP, and purchase the common stock at a purchase price per share equal to 85% of the lesser of the fair market value of the common stock on (i) the offering date, which is defined as the first business day of the offering period, or (ii) the purchase date, which is the final business day of the purchase period. The fair value of the ESPP offerings was 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 during 2022, as well as updated valuation information as of the modification date, for any offerings for which a modification occurred, requiring incremental expense to be measured at the modification date: Nine Months Ended September 30, 2022 Risk-free interest rates 0.60% to 3.48% Expected term 0.5 to 2.0 years Volatility 58.3% 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. For the inputs to the original grant date fair value for that offering in October 2021, please see Note 10. “Stock-Based Compensation” t within the footnotes to the audited annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Stock-Based Compensation Expense Stock-based compensation expense for stock options, RSUs, PRSUs, and the ESPP, included in the Condensed Consolidated Statements of Operations, net of amounts capitalized to internal-use software, as described in Note 4, was as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Customer support and operations $ 226 $ 40 $ 596 $ 77 Marketing 3,352 486 7,149 1,207 Technology and development 13,238 1,698 30,959 3,522 General and administrative 8,929 2,516 29,176 4,159 Total $ 25,745 $ 4,740 $ 67,880 $ 8,965 As of September 30, 2022, the total unamortized compensation cost related to all non-vested equity awards, including options, RSUs, and PRSUs was $240.6 million, which will be amortized over a weighted-average remaining requisite service period of approximately 2.9 years. As of September 30, 2022, the total unrecognized compensation expense related to the ESPP was $5.1 million, which is expected to be amortized over the next 1.9 years. The Company did not record a material income tax benefit related to stock-based compensation expense and stock option exercises, during the three and nine months ended September 30, 2022 and 2021, since the Company currently maintains a full valuation allowance against its net deferred tax assets in the jurisdictions where material stock compensation expense charges are incurred, and stock option exercises occurred. |
Related Party Arrangements
Related Party Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party ArrangementsThe Company entered into promissory note agreements in October 2018 which were fully repaid in August 2021. The promissory note agreements were entered into with two executive employees in conjunction with their early exercise of stock options to purchase 1,800,000 shares of the Company’s common stock. The principal amount of 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 nonrecourse 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 in the Condensed Consolidated Financial Statements, but were historically excluded from the Company’s net loss per common share calculations, as these shares of common 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 pretax income wer e (0.9)% and (2.1)% for the three months ended September 30, 2022 and 2021, respectively and (1.6)% and (5.1)% for the nine months ended September 30, 2022 and 2021, respectively. The difference between the effective tax rate and the U.S. federal statutory rate of 21.0% 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, 2022, tax years 2011 through 2021 remain open for examination by taxing authorities. The Company has applied ASC 740, Income Taxes, |
401(k) Defined Contribution Pla
401(k) Defined Contribution Plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
401(k) Defined Contribution Plan | 401(k) Defined Contribution Plan 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 pretax 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 $0.3 million and $0.2 million to the 401(k) plan during each of the nine months ended September 30, 2022 and 2021, respectively, which represents the current period contribution for the prior plan year. The Company may also make discretionary profit-sharing contributions. No profit-sharing contributions were made during the three and nine months ended September 30, 2022 and 2021. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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; therefore, no such amounts have been accrued as of September 30, 2022 and December 31, 2021. 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, 2022 and December 31, 2021. Indirect taxes The Company is subject to indirect taxation in various states and foreign jurisdictions in which it conducts business. The Company continually evaluates those jurisdictions in which indirect tax obligations exist to determine whether a loss is probable, as defined under U.S. GAAP, and the amount can be estimated. Determination of whether a loss is 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 information. Such assessments include consideration of management’s evaluation of domestic and international tax laws and regulations, external legal advice, and the extent to which they may apply to our business and industry. Our assessment of probability includes consideration of recent inquiries, potential or actual self-disclosure, and applicability of tax rules driven by the growth in our business. As a result of this assessment, management accrued an estimated liability of approximately $3.8 million as of December 31, 2021, reflecting the amount that the Company believes is probable and estimable. There was no change to the estimated liability as of September 30, 2022. The estimated liability is recorded within ‘ Accrued expenses and other current liabilities ’ on the Company’s Condensed Consolidated Balance Sheets. Although the Company believes its indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits or settlements could be materially different than the amounts recorded, and such differences could be material. Reserve for Transaction Losses The Company is exposed to transaction losses including chargebacks, unauthorized credit card use, fraud associated with customer 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 expenses and other current liabilities ’ on the Condensed Consolidated Balance Sheets. The provision for transaction losses is included as a component of ‘ Transaction expenses ’ within the Condensed Consolidated Statements of Operations. The table below summarizes the Company’s reserve for transaction losses for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Beginning balance $ 2,264 $ 2,321 $ 3,134 $ 3,250 Provisions for transaction losses 13,005 5,492 31,240 20,065 Losses incurred, net of recoveries (12,514) (6,306) (31,619) (21,808) Ending balance $ 2,755 $ 1,507 $ 2,755 $ 1,507 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses & Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, December 31, (in thousands) 2022 2021 Trade settlement liability (1) $ 48,101 $ 18,924 ESPP employee contributions 449 1,551 Accrued transaction expense 15,987 12,639 Accrued marketing expense 8,546 10,788 Reserve for transaction losses 2,755 3,134 Accrued salaries and benefits 4,593 2,923 Other accrued expenses 19,142 16,724 Total $ 99,573 $ 66,683 _________________ |
Segment and Geographical Inform
Segment and Geographical Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | 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 one segment. Based on the information provided to and reviewed by the Company’s CODM, the Company believes that the nature, amount, timing, and uncertainty 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) 2022 2021 2022 2021 United States $ 122,068 $ 88,852 $ 337,986 $ 238,695 Canada 20,624 15,025 56,983 39,980 Rest of world 26,567 17,367 67,559 44,675 Total revenue $ 169,259 $ 121,244 $ 462,528 $ 323,350 Revenue is attributed to the country in which the sending customer is located. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited 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 Annual Report on Form 10-K, for the year ended December 31, 2021. The accompanying unaudited interim 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 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, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other future annual or interim period. |
Principles of Consolidation | Principles of Consolidation The 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 | Use of Estimates The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the 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. 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. |
Concentration of Credit Risk | 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 located in India, Philippines and Mexico. 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 three and nine months ended September 30, 2022 and 2021. |
Trade Settlement Liabilities | Trade Settlement Liabilities Our trade settlement liability represents the total of book overdrafts and disbursement postfunding liabilities owed to our disbursement partners. Book overdrafts are created when the sum of outstanding checks related to a specific bank account are in excess of funds on deposit for the respective bank account. Disbursement postfunding liabilities are created when the sum of customer transactions related to a specific account held with a disbursement partner are in excess of funds on deposit for the respective account. |
Deferred Offering Costs | 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 noncurrent assets |
Advertising | Advertising Advertising expenses are charged to operations as incurred and are included as a component of ‘ Marketing Expenses’ within the |
Business Combinations and Asset Acquisitions | Business Combinations and Asset Acquisitions The Company evaluates acquisitions to determine if they meet the definition of a business. If the acquisition does meet the definition of a business, it is accounted for as a business combination. For a business combination, assets acquired and liabilities assumed are generally recorded at their fair value at the date of acquisition. Any excess of the fair value of consideration transferred for the business, over the fair values of the identifiable assets acquired and liabilities assumed is recognized as goodwill. Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. In an asset acquisition, the cost of the acquisition, including transaction costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date, and no goodwill is recognized. Transaction costs related to business combinations are expensed as incurred and are included in ‘ General and Administrative Expenses ’ in the Condensed Consolidated Statements of Operations. Acquisition expenses primarily include external legal, accounting, valuation, and due diligence costs, as well as advisory and other professional services fees necessary to integrate acquired businesses. Transaction costs totaled $1.8 million and $2.6 million for the three and nine months ended September 30, 2022. There were no transaction costs incurred for the three and nine months ended September 30, 2021. Such costs are primarily related to our pending acquisition of Rewire, as further discussed in “Management’s Discussion and Analysis” included in Part I, Item 2 within this Quarterly Report on Form 10-Q. |
Intangible Assets | Intangible Assets Intangible assets with finite lives primarily consist of licenses acquired through business combinations or asset acquisitions. Intangible assets acquired through business combination are recorded at their respective estimated fair values upon acquisition close. Other intangible assets acquired through asset acquisition are recorded at their respective cost. The Company determines the estimated useful lives for acquired intangible assets based on the expected future cash flows associated with the respective asset. The Company's intangible assets with finite lives are amortized using an economic benefit method, over their estimated useful lives, unless amortizing on a straight-line basis would not be significantly different. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements (“ASU”) In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40),Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Under existing U.S. GAAP, there is diversity in practice in accounting for the costs of implementing cloud computing arrangements (“CCA”) that are service contracts. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard also requires the presentation of the amortization of the capitalized implementation costs in the same line item in the Condensed Consolidated Statements of Operations as the fees associated with the hosting arrangement. The new standard is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021 with early adoption permitted. This ASU was adopted on a prospective basis for the fiscal year ended December 31, 2021. The Company assessed the impact of the guidance to its consolidated financial statements for the three and nine months ended September 30, 2021 and concluded that the standard did not have a material impact on its financial statements. See Note 4. for further disclosure of the ongoing impact of ASU 2018-15 to the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2022. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology pursuant to which loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The Condensed Consolidated Statements of Operations would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. The new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year with early adoption permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements. There are new accounting pronouncements issued by the FASB that we have adopted or will adopt, as applicable. We do not believe any of these accounting pronouncements have had, or will have, a material impact on our consolidated financial statements or disclosures. |
Revenue | Revenue The Company’s primary source of revenue is generated from its remittance business. Revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads earned 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. 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, 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, 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 in the Condensed Consolidated Statements of Operations. The Company does not have any capitalized contract acquisition costs. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue | The deferred revenue balances from contracts with customers were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Deferred revenue, beginning of the period $ 1,084 $ 1,126 $ 1,212 $ 1,105 Deferred revenue, end of the period 1,122 1,269 1,122 1,269 Change in deferred revenue during the period 38 143 (90) 164 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following: September 30, December 31, (in thousands) 2022 2021 Capitalized internal-use software $ 12,682 $ 9,022 Computer and office equipment 5,825 4,700 Furniture and fixtures 1,982 1,445 Leasehold improvements 6,656 6,655 Projects in Process 17 533 27,162 22,355 Less: Accumulated depreciation and amortization (16,892) (13,106) Property and equipment, net $ 10,270 $ 9,249 |
Schedule of Hosting Arrangements | Amortization expense related to cloud computing arrangements for the three and nine months ended September 30, 2022 was as follows: Three Months Ended Nine Months Ended (in thousands) September 30, 2022 Technology and development $ 166 $ 413 General and administrative 4 19 Total amortization $ 170 $ 432 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the 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. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share amounts) 2022 2021 2022 2021 Numerator: Net loss $ (33,069) $ (12,962) $ (94,624) $ (22,180) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders: Basic and diluted 168,604,378 31,641,400 166,517,398 26,055,903 Net loss per share attributable to common stockholders: Basic and diluted $ (0.20) $ (0.41) $ (0.57) $ (0.85) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 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 antidilutive: As of September 30, 2022 2021 Stock options outstanding 18,364,196 24,061,073 RSUs outstanding (1) 19,930,996 1,301,084 ESPP 1,396,853 — Shares subject to repurchase 205,727 554,973 Total 39,897,772 25,917,130 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following is a summary of the Company’s stock option activity during the nine months ended September 30, 2022: 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, 2022 23,386,942 $ 3.70 7.66 $ 395,676 Granted 166,113 11.15 Exercised (3,776,392) 2.18 30,850 Forfeited (1,412,467) 5.12 Balances as of September 30, 2022 18,364,196 3.98 7.03 133,458 Vested and exercisable as of September 30, 2022 10,653,383 2.37 6.19 93,049 Vested and expected to vest as of September 30, 2022 18,524,923 $ 3.97 7.04 $ 134,689 _________________ (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. |
Schedule of Stock Option Valuation Assumptions | The fair value of each employee stock option granted during the three and nine months ended September 30, 2022 and 2021 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, 2022 2021 2022 2021 Risk-free interest rates 2.86% 0.74% to 1.10% 2.86% 0.32% to 1.19% Expected term 6.1 years 5.0 to 6.5 years 6.1 years 3.5 to 6.8 years Volatility 64.0% 49.3% to 50.5 % 64.0% 37.8% to 50.5 % Dividend rate —% —% —% —% |
Schedule of Restricted Stock Award Activity | Restricted stock unit activity, including PRSUs, during the nine months ended September 30, 2022 was as follows: Number of Shares Weighted-Average Grant-Date Fair Value Per Share Unvested at January 1, 2022 3,372,585 $ 24.83 Granted 19,393,131 10.66 Vested (1,770,540) 13.64 Cancelled/forfeited (1,064,180) 17.49 Unvested at September 30, 2022 19,930,996 12.43 |
Schedule of ESPP Valuation Assumptions | The fair value of the ESPP offerings was 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 during 2022, as well as updated valuation information as of the modification date, for any offerings for which a modification occurred, requiring incremental expense to be measured at the modification date: Nine Months Ended September 30, 2022 Risk-free interest rates 0.60% to 3.48% Expected term 0.5 to 2.0 years Volatility 58.3% to 73.0% Dividend rate — % |
Schedule of Share-based Compensation Expense | Stock-based compensation expense for stock options, RSUs, PRSUs, and the ESPP, included in the Condensed Consolidated Statements of Operations, net of amounts capitalized to internal-use software, as described in Note 4, was as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Customer support and operations $ 226 $ 40 $ 596 $ 77 Marketing 3,352 486 7,149 1,207 Technology and development 13,238 1,698 30,959 3,522 General and administrative 8,929 2,516 29,176 4,159 Total $ 25,745 $ 4,740 $ 67,880 $ 8,965 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Reserve for Transaction Losses | The table below summarizes the Company’s reserve for transaction losses for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Beginning balance $ 2,264 $ 2,321 $ 3,134 $ 3,250 Provisions for transaction losses 13,005 5,492 31,240 20,065 Losses incurred, net of recoveries (12,514) (6,306) (31,619) (21,808) Ending balance $ 2,755 $ 1,507 $ 2,755 $ 1,507 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, (in thousands) 2022 2021 Trade settlement liability (1) $ 48,101 $ 18,924 ESPP employee contributions 449 1,551 Accrued transaction expense 15,987 12,639 Accrued marketing expense 8,546 10,788 Reserve for transaction losses 2,755 3,134 Accrued salaries and benefits 4,593 2,923 Other accrued expenses 19,142 16,724 Total $ 99,573 $ 66,683 _________________ |
Segment and Geographical Info_2
Segment and Geographical Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | 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) 2022 2021 2022 2021 United States $ 122,068 $ 88,852 $ 337,986 $ 238,695 Canada 20,624 15,025 56,983 39,980 Rest of world 26,567 17,367 67,559 44,675 Total revenue $ 169,259 $ 121,244 $ 462,528 $ 323,350 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Sep. 30, 2022 country | |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of countries in which entity operates (over) | country | 170 | |||
Consideration received, net | $ | $ 305.2 | |||
Stock issuance costs | $ | $ 20.8 | $ 20.8 | $ 20.8 | |
Preferred stock reclassified into stockholders' equity (in shares) | 127,410,631 | 127,410,631 | 127,410,631 | |
Conversion ratio | 1 | 1 | 1 | |
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued and sold (in shares) | 7,000,000 | |||
Share price (in dollars per share) | $ / shares | $ 43 | $ 43 | $ 43 | |
IPO - selling shareholders | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued and sold (in shares) | 5,162,777 | |||
Share price (in dollars per share) | $ / shares | $ 43 | 43 | 43 | |
Private Placement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued and sold (in shares) | 581,395 | |||
Share price (in dollars per share) | $ / shares | $ 43 | $ 43 | $ 43 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Trade settlement liability(1) | $ 48,101,000 | $ 48,101,000 | $ 18,924,000 | ||||
Deferred offering costs reclassified to additional-paid-in capital | $ 4,300,000 | ||||||
IPO and debt issuance costs incurred but not yet paid | 0 | $ 2,287,000 | |||||
Advertising expense | 34,600,000 | $ 25,600,000 | 105,200,000 | 70,100,000 | |||
Acquisition related costs | 1,800,000 | 0 | 2,600,000 | 0 | |||
Share-based compensation expense | 25,745,000 | 4,740,000 | 67,880,000 | 8,965,000 | |||
Stock-based compensation, additional paid in capital | $ 26,213,000 | $ 4,861,000 | $ 69,248,000 | $ 9,086,000 | |||
Earnings per share, basic (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) | |||
Earnings per share, diluted (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) | |||
Previously reported | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Share-based compensation expense | $ 4,400,000 |
Revenue - Schedule of Deferred
Revenue - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue, beginning of the period | $ 1,084 | $ 1,126 | $ 1,212 | $ 1,105 |
Deferred revenue, end of the period | 1,122 | 1,269 | 1,122 | 1,269 |
Change in deferred revenue during the period | $ 38 | $ 143 | $ (90) | $ 164 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized, deferred revenue | $ 0.4 | $ 0.3 | $ 0.6 | $ 0.3 |
Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales incentives | 6.7 | 4.3 | 17.5 | 13.4 |
Sales and marketing expense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales incentives | $ 5.2 | $ 2.6 | $ 13.8 | $ 8.4 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27,162 | $ 22,355 |
Less: Accumulated depreciation and amortization | (16,892) | (13,106) |
Property and equipment, net | 10,270 | 9,249 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,682 | 9,022 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,825 | 4,700 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,982 | 1,445 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,656 | 6,655 |
Projects in Process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 17 | $ 533 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 1,900,000 | $ 1,300,000 | $ 4,900,000 | $ 3,900,000 |
Internal-use software costs, impairment | 0 | 0 | 0 | 0 |
Stock-based compensation expense capitalized to internal-use software | 1,368,000 | 0 | ||
Internal-use software costs capitalized | 400,000 | 1,100,000 | ||
Internal-use software costs, amortization | 170,000 | 432,000 | ||
Capitalized cost, net | 1,600,000 | 1,600,000 | ||
Prepaid Expenses and Other Current Assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Capitalized cost, net | 700,000 | 700,000 | ||
Other Noncurrent Assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Capitalized cost, net | 900,000 | 900,000 | ||
Reclassification | 500,000 | 500,000 | ||
Capitalized internal-use software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | 1,100,000 | 600,000 | 2,500,000 | 1,800,000 |
Property and equipment capitalized | 1,200,000 | $ 500,000 | 3,800,000 | $ 2,000,000 |
Stock-based compensation expense capitalized to internal-use software | $ 500,000 | $ 1,400,000 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Hosting Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Internal-use software costs, amortization | $ 170 | $ 432 |
Technology and development | ||
Property, Plant and Equipment [Line Items] | ||
Internal-use software costs, amortization | 166 | 413 |
General and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Internal-use software costs, amortization | $ 4 | $ 19 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Mar. 31, 2022 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 50 | $ 80 |
Debt (Details)
Debt (Details) | 1 Months Ended | 3 Months Ended | ||||
Sep. 13, 2021 USD ($) | Nov. 30, 2020 USD ($) businessDay | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 12, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding | $ 19,200,000 | $ 18,900,000 | ||||
Line of credit | Revolving credit facility | New Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000,000 | |||||
Debt issuance costs, gross | $ 1,400,000 | |||||
Debt issuance costs, net | $ 400,000 | |||||
Unused commitment fee percentage | 0.25% | |||||
Adjusted quick ratio | 1.50 | |||||
Minimum liquidity | $ 100,000,000 | |||||
Outstanding borrowings | 0 | 0 | ||||
Remaining borrowing capacity | $ 230,800,000 | $ 231,100,000 | ||||
Line of credit | Revolving credit facility | New Revolving Credit Facility | NYFRB Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate, base | 0.005% | |||||
Line of credit | Revolving credit facility | New Revolving Credit Facility | Adjusted LIBOR, 1.00% Floor | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate, base | 1% | |||||
Floor rate | 1% | |||||
Line of credit | Revolving credit facility | New Revolving Credit Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate, spread on variable rate | 0.005% | |||||
Line of credit | Revolving credit facility | New Revolving Credit Facility | Adjusted LIBOR, 0.00% Floor | ||||||
Debt Instrument [Line Items] | ||||||
Floor rate | 0% | |||||
Variable rate, spread on variable rate | 1.50% | |||||
Line of credit | Revolving credit facility | Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Debt issuance costs, net | $ 500,000 | |||||
Write off of debt issuance cost | $ 100,000 | |||||
Unused commitment fee percentage | 0.40% | |||||
Repayment terms, maximum days to repay | businessDay | 20 | |||||
Base rate | 3.25% | |||||
Line of credit | Revolving credit facility | Credit Agreement | Fed Funds Effective Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate, base | 0.50% | |||||
Variable rate, spread on variable rate | 1% | |||||
Line of credit | Letter of credit | New Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 60,000,000 | |||||
Line of credit | Letter of credit | Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 30,000,000 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (33,069) | $ (12,962) | $ (94,624) | $ (22,180) |
Denominator: | ||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 168,604,378 | 31,641,400 | 166,517,398 | 26,055,903 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 168,604,378 | 31,641,400 | 166,517,398 | 26,055,903 |
Net loss per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) |
Diluted (in dollars per share) | $ (0.20) | $ (0.41) | $ (0.57) | $ (0.85) |
Net Loss Per Common Share - S_2
Net Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 39,897,772 | 25,917,130 |
Stock options outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 18,364,196 | 24,061,073 |
RSUs outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 19,930,996 | 1,301,084 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 1,396,853 | 0 |
Shares subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 205,727 | 554,973 |
Common Stock (Details)
Common Stock (Details) | 1 Months Ended | 9 Months Ended | |||||
Sep. 28, 2022 USD ($) | Sep. 30, 2021 shares | Sep. 28, 2021 USD ($) shares | Jul. 31, 2021 shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 $ / shares shares | |
Class of Stock [Line Items] | |||||||
Common stock, authorized (in shares) | 725,000,000 | 725,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Voting rights, number of votes | vote | 1 | ||||||
Dividends declared, paid and unpaid | $ | $ 0 | $ 0 | |||||
Donation of common stock | $ | $ 2,000,000 | $ 6,900,000 | $ 1,972,000 | $ 6,933,000 | |||
Warrant term | 10 years | ||||||
Number of securities called by warrants (in shares) | 256,250 | ||||||
Issuance of common stock upon exercise of warrants (in shares) | 254,014 | ||||||
Warrants outstanding (in shares) | 0 | ||||||
Pledge 1% | |||||||
Class of Stock [Line Items] | |||||||
Common stock, reserved (in shares) | 1,819,609 | ||||||
Common stock, reserved, percent of fully-diluted capitalization | 1% | ||||||
Common stock, pledged term | 10 years | ||||||
Pledge 1% | Multifaceted social good program | |||||||
Class of Stock [Line Items] | |||||||
Stock donated (in shares) | 181,961 | ||||||
Minimum | |||||||
Class of Stock [Line Items] | |||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.054 | ||||||
Maximum | |||||||
Class of Stock [Line Items] | |||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.64 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | ||||||||
Preferred stock reclassified into stockholders' equity (in shares) | 127,410,631 | 127,410,631 | 127,410,631 | |||||
Preferred stock reclassified into stockholders' equity | $ 390,700 | $ 390,687 | $ 390,687 | |||||
Shares Authorized | 50,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, outstanding (in shares) | 0 | 0 | 0 | 0 | 0 | 0 | 127,410,631 | 127,082,605 |
Preferred stock, issued (in shares) | 0 | 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 01, 2022 USD ($) | Sep. 30, 2021 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) period $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Dec. 31, 2011 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted-average grant date fair value, options granted (in dollars per share) | $ / shares | $ 6.78 | $ 15.31 | $ 6.78 | $ 5.22 | |||
Aggregate grant-date fair value, options | $ | $ 2,500,000 | $ 2,100,000 | $ 9,600,000 | $ 5,400,000 | |||
Tax benefit, stock-based compensation expense | $ | 0 | 0 | |||||
Tax benefit, exercise of stock-based awards | $ | $ 0 | $ 0 | |||||
Equity Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 43,899,677 | ||||||
2021 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | ||||
Number of additional shares authorized | 552,736 | ||||||
Common stock, reserved (in shares) | 25,552,736 | 25,552,736 | 25,552,736 | ||||
Common stock reserved for issuance, annual increase percentage | 5% | 5% | 5% | ||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, reserved (in shares) | 14,733,269 | 14,733,269 | |||||
Cliff vesting period | 1 year | ||||||
Exercisable period | 10 years | ||||||
Exercisable period, termination of service | 3 months | ||||||
Stock options | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Stock options | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Performance sares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Cliff vesting period | 1 year | ||||||
Share-based compensation expense, accelerated cost | $ | $ 1,100,000 | ||||||
Restricted stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares issued | 124,026 | ||||||
Weighted-average grant date fair value, granted (in dollars per share) | $ / shares | $ 10.66 | $ 23.16 | |||||
Weighted-average aggregate grant date fair value, vested | $ | $ 24,200,000 | $ 100,000 | |||||
Unamortized compensation cost | $ | $ 240,600,000 | $ 240,600,000 | |||||
Unamortized compensation cost, recognition period | 2 years 10 months 24 days | ||||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of purchase periods | period | 4 | ||||||
Purchase period | 6 months | ||||||
Consecutive offering period | 24 months | ||||||
Plan modification, incremental cost | $ | $ 3,600,000 | ||||||
Maximum employee contribution rate | 15% | 15% | |||||
ESPP purchase price of common stock, percent of market price | 85% | ||||||
Unamortized compensation cost | $ | $ 5,100,000 | $ 5,100,000 | |||||
Unamortized compensation cost, recognition period | 1 year 10 months 24 days | ||||||
ESPP | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Consecutive offering period | 27 months | ||||||
ESPP | ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 3,500,000 | 3,500,000 | 3,500,000 | ||||
Common stock, reserved (in shares) | 4,762,721 | 4,762,721 | |||||
Common stock reserved for issuance, annual increase percentage | 1% | 1% | 1% | ||||
Maximum number of shares available over award term | 35,000,000 | 35,000,000 | 35,000,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Options Outstanding | ||
Beginning balance (in shares) | 23,386,942 | |
Granted (in shares) | 166,113 | |
Exercised (in shares) | (3,776,392) | |
Forfeited (in shares) | (1,412,467) | |
Ending balance (in shares) | 18,364,196 | 23,386,942 |
Vested and exercisable (in shares) | 10,653,383 | |
Vested and expected to vest (in shares) | 18,524,923 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 3.70 | |
Granted (in dollars per share) | 11.15 | |
Exercised (in dollars per share) | 2.18 | |
Forfeited (in dollars per share) | 5.12 | |
Ending balance (in dollars per share) | 3.98 | $ 3.70 |
Vested and exercisable (in dollars per share) | 2.37 | |
Vested and expected to vest (in dollars per share) | $ 3.97 | |
Weighted-Average Remaining Contractual Life (Years) | ||
Outstanding | 7 years 10 days | 7 years 7 months 28 days |
Vested and exercisable | 6 years 2 months 8 days | |
Vested and expected to vest | 7 years 14 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 133,458 | $ 395,676 |
Exercised | 30,850 | |
Vested and exercisable | 93,049 | |
Vested and expected to vest | $ 134,689 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options outstanding | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 2.86% | 2.86% | ||
Expected term | 6 years 1 month 6 days | 6 years 1 month 6 days | ||
Volatility | 64% | 64% | ||
Dividend rate | 0% | 0% | 0% | |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend rate | 0% | |||
Minimum | Stock options outstanding | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 0.74% | 0.32% | ||
Expected term | 5 years | 3 years 6 months | ||
Volatility | 49.30% | 37.80% | ||
Minimum | ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 0.60% | |||
Expected term | 6 months | |||
Volatility | 58.30% | |||
Maximum | Stock options outstanding | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 1.10% | 1.19% | ||
Expected term | 6 years 6 months | 6 years 9 months 18 days | ||
Volatility | 50.50% | 50.50% | ||
Maximum | ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 3.48% | |||
Expected term | 2 years | |||
Volatility | 73% |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Restricted Stock Award Activity (Details) - Restricted stock - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Number of Shares | ||
Unvested, beginning balance (in shares) | 3,372,585 | |
Granted (in shares) | 19,393,131 | |
Vested (in shares) | (1,770,540) | |
Cancelled/forfeited (in shares) | (1,064,180) | |
Unvested, ending balance (in shares) | 19,930,996 | |
Weighted-Average Grant-Date Fair Value Per Share | ||
Unvested, beginning balance (in dollars per share) | $ 24.83 | |
Granted (in dollars per share) | 10.66 | $ 23.16 |
Vested (in dollars per share) | 13.64 | |
Cancelled/forfeited (in dollars per share) | 17.49 | |
Unvested, ending balance (in dollars per share) | $ 12.43 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 25,745 | $ 4,740 | $ 67,880 | $ 8,965 |
Customer support and operations | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 226 | 40 | 596 | 77 |
Marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 3,352 | 486 | 7,149 | 1,207 |
Technology and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 13,238 | 1,698 | 30,959 | 3,522 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 8,929 | $ 2,516 | $ 29,176 | $ 4,159 |
Related Party Arrangements (Det
Related Party Arrangements (Details) $ in Millions | 8 Months Ended | 9 Months Ended |
Aug. 31, 2021 USD ($) employee shares | Sep. 30, 2022 shares | |
Related Party Transaction [Line Items] | ||
Stock options exercised (in shares) | 3,776,392 | |
Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Number of executive employees | employee | 2 | |
Stock options exercised (in shares) | 1,800,000 | |
Related party promissory note receivable | $ | $ 3.1 | |
Related party interest rate | 2.83% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (0.90%) | (2.10%) | (1.60%) | (5.10%) |
Uncertain tax positions | $ 0 | $ 0 |
401(k) Defined Contribution P_2
401(k) Defined Contribution Plan (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Employer matching contribution, percent of employer match | 50% | |
Employer matching contribution, percent of employees' gross pay | 3% | |
Maximum annual employer contributions per employee | $ 1,000 | |
Employer contribution | 300,000 | $ 200,000 |
Profit-sharing | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer contributions, profit sharing | $ 0 | $ 0 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) | Sep. 30, 2022 USD ($) claim | Dec. 31, 2021 USD ($) |
Indemnification agreement | ||
Loss Contingencies [Line Items] | ||
Loss contingency, number of claims | claim | 0 | |
Loss contingency accrual | $ 0 | $ 0 |
VAT Inquiry from Ireland Revenue | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual, current | $ 3,800,000 |
Commitment and Contingencies _2
Commitment and Contingencies - Schedule of Reserve for Transaction Losses (Details) - Transaction losses - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loss Contingency Accrual [Roll Forward] | ||||
Beginning balance | $ 2,264 | $ 2,321 | $ 3,134 | $ 3,250 |
Provisions for transaction losses | 13,005 | 5,492 | 31,240 | 20,065 |
Losses incurred, net of recoveries | (12,514) | (6,306) | (31,619) | (21,808) |
Ending balance | $ 2,755 | $ 1,507 | $ 2,755 | $ 1,507 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||||||
Trade settlement liability(1) | $ 48,101 | $ 18,924 | ||||
ESPP employee contributions | 449 | 1,551 | ||||
Accrued transaction expense | 15,987 | 12,639 | ||||
Accrued marketing expense | 8,546 | 10,788 | ||||
Accrued salaries and benefits | 4,593 | 2,923 | ||||
Other accrued expenses | 19,142 | 16,724 | ||||
Total | 99,573 | 66,683 | ||||
Transaction losses | ||||||
Loss Contingencies [Line Items] | ||||||
Reserve for transaction losses | $ 2,755 | $ 2,264 | $ 3,134 | $ 1,507 | $ 2,321 | $ 3,250 |
Segment and Geographical Info_3
Segment and Geographical Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment and Geographical Info_4
Segment and Geographical Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 169,259 | $ 121,244 | $ 462,528 | $ 323,350 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 122,068 | 88,852 | 337,986 | 238,695 |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 20,624 | 15,025 | 56,983 | 39,980 |
Rest of world | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 26,567 | $ 17,367 | $ 67,559 | $ 44,675 |