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What changed in Remitly Global, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Remitly Global, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+570 added−613 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-28)

Top changes in Remitly Global, Inc.'s 2023 10-K

570 paragraphs added · 613 removed · 444 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

122 edited+46 added−40 removed45 unchanged
Biggest changeOur technology platform is comprised of the following: • Core transaction engine that underpins the entire transaction lifecycle from pricing and foreign currency, to funding, processing, and, ultimately, to disbursement; • Customer experience engine with corridor-specific user journeys and multilingual self-service or real-time support; • Disbursement network for partner integrations that supports a diverse set of delivery methods for our customers and their recipients in over 170 countries; • Marketing technology stack that enables our marketing team to efficiently operate and improve the quality of our customer experiences by supporting our localization strategies and efficiently capturing and analyzing data to ensure maximum long-term return on our marketing investments; and • Our electronic KYC, machine learning-based fraud scoring and payment authentication processes that all take place in real-time to give our customers immediate feedback and are in compliance with highly complex and continuously evolving global and local regulations.
Biggest changeOur technology platform is comprised of the following: • Core transaction engine that underpins the entire transaction lifecycle along with a sophisticated pricing engine that enables ongoing price optimization; • Customer experience interface, across Android, iOS, and Web with corridor-specific user journeys and multilingual self-service or real-time support; • Disbursement network for partner integrations that supports a diverse set of disbursement methods for our customers and their recipients in over 170 countries; • Our electronic Know Your Customer (“KYC”), machine learning-based fraud scoring and payment authentication processes that all take place in real-time to give our customers immediate feedback and are in compliance with highly complex and continuously evolving global and local regulations; and • Marketing technology stack that enables our marketing team to efficiently operate and improve the quality of our customer experiences by supporting our localization strategies and efficiently capturing and analyzing data to ensure maximum long-term return on our marketing investments.
To us, customer centricity means “ we are here to listen to, learn from, and serve our customers. ” Our other core values fall broadly into three categories: • Our purpose: Aim for the stars, be an owner, earn trust through integrity, and be joyful; • Building relationships: Lead authentically, be global, hire and grow exceptional people, be constructively direct, and be a compassionate partner; and • Taking action: Have a bias for action, be data-driven, sweat the details, deliver on promises, overcome fear, and continuously improve.
To us, customer centricity means “ we are here to listen to, learn from, and serve our customers .” Our other core values fall broadly into three categories: • Our purpose: Aim for the stars, be an owner, and earn trust through integrity; and • Building relationships: Lead authentically, be global, hire and grow exceptional people, be constructively direct, be a compassionate partner, and be joyful; and • Taking action: Have a bias for action, be data-driven, sweat the details, deliver on promises, overcome fear, and continuously improve.
Digital-first providers of payments, money transfer and remittance products that aim to be convenient, transparent and affordable, with varying corridor-related focuses, such as developed-to-developing or developed-to-developed markets. • Emerging players focused on complementary financial services.
Digital-first providers of payments, money transfer, and remittance products that aim to be convenient, transparent, and affordable, with varying corridor-related focuses, such as developed-to-developing or developed-to-developed markets. • Emerging players focused on complementary financial products and services.
The BSA, among other things, requires companies engaged in money transmission register with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury as money services businesses; and to develop and maintain risk-based AML programs, report suspicious activity, and collect and maintain information about their customers and certain transaction records.
The BSA, among other things, requires companies engaged in money transmission to register with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury as money services businesses and to develop and maintain risk-based AML programs, report suspicious activity, and collect and maintain information about their customers and certain transaction records.
Online-only banks, wallets, and other emerging digital players typically offer a subset of the financial services offered by traditional banks, and generally place a greater emphasis on convenience and user experience. Similarly, those utilizing blockchain technology and digital or crypto assets often claim benefits of lower cost transactions and higher transfer speeds relative to incumbent money-movement providers.
Digital-only banks, wallets, and other emerging digital players typically offer a subset of the financial services offered by traditional banks, and generally place a greater emphasis on convenience and user experience. Similarly, those utilizing blockchain technology and digital or crypto assets often claim benefits of lower cost transactions and higher transfer speeds relative to incumbent money-movement providers.
Bribery Act in the United Kingdom and similar laws in the other jurisdictions in which we or our disbursement partners operate, which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials for the purpose of influencing official action or otherwise gaining an unfair business advantage, such as obtaining or retaining business.
Bribery Act in the United Kingdom, and similar laws in the other jurisdictions in which we or our disbursement partners or disbursement sub-partners operate, which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials for the purpose of influencing official action or otherwise gaining an unfair business advantage, such as obtaining or retaining business.
We have partner relationships with global banks and leading payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, card-based payments and alternative payment methods.
We have partner relationships with global banks, aggregators, and leading payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, card-based payments, and alternative payment methods.
Available Information Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities and Exchange Commission (the “SEC”).
Available Information Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities and Exchange Commission (the “SEC”).
Additionally, we expect to leverage our localization expertise and our technology platform to grow the number of disbursement, payment and other partners in our global network and increase the number of direct integrations with such partners.
Additionally, we expect to leverage our localization expertise and our technology platform to grow the number of disbursement, payment, and other partners in our global network and increase the quality and number of direct integrations with such partners.
Our remittance revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on the Company’s currency purchases.
Our remittance revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases.
We are also, to a lesser extent, impacted by AML laws, regulations, and supervisory guidance in the other countries in which our disbursement partners operate.
We are also, to a lesser extent, impacted by AML laws, regulations, and supervisory guidance in the other countries in which our disbursement partners and disbursement sub-partners operate.
Remitly also participates in the World Professional Association for Transgender Health (WPATH) so our teammates who identify as Transsexual, Transgender, and Gender Nonconforming People have access to the care they need. We sponsor a 401(k) plan that includes a matching contribution and offer financial coaching through a third-party provider.
Remitly also participates in the World Professional Association for Transgender Health (the “WPATH”) so our teammates who identify as Transsexual, Transgender, and Gender Nonconforming People have access to the care they need. We sponsor a 401(k) plan that includes a matching contribution and offer financial coaching through a third-party provider.
GDPR and other U.K. privacy and data security laws, rules or regulations may develop, including as compared to the GDPR, nor can we predict the effects of divergent laws and related guidance. Moreover, the U.K. Government has launched a public consultation on proposed reforms to the data protection framework in the United Kingdom.
GDPR and other U.K. privacy and cybersecurity laws, rules, or regulations may develop, including as compared to the GDPR, nor can we predict the effects of divergent laws and related guidance. Moreover, the U.K. government has launched a public consultation on proposed reforms to the data protection framework in the United Kingdom.
Employee Engagement and Retention. Employee voice and engagement is a cornerstone to how we foster a culture of belonging. This focus allows all of us to do our personal best to deliver for our customers every day. Activities and initiatives include annual employee engagement surveys, pulse surveys, ongoing feedback sessions, office hours, and 1:1s.
Employee Engagement and Retention. Employee voice and engagement is a cornerstone to how we foster a culture of belonging. This focus allows all of us to do our personal best to deliver for our customers every day. Activities and initiatives include annual employee engagement surveys, pulse surveys and action planning, ongoing feedback sessions, office hours, and 1:1s.
We believe the positive relationship between our customers, our team members and our mission-oriented culture differentiates us and is a key driver of our business success. Attracting, recruiting, developing, and retaining globally diverse talent enables us to deliver on our brand promise to customers and serve our broad set of stakeholders.
We believe the positive relationship between our customers, our team members, and our mission-oriented culture differentiates us and is a key driver of our business success. Attracting, recruiting, growing, and retaining globally diverse talent enables us to deliver on our brand promise to customers and serve our broad set of stakeholders.
We regularly review these key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance.
In addition to our financial results, we regularly review key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance.
We strive to provide comprehensive benefits and services that help meet the unique needs of our employees, including benefits such as medical, dental, and vision insurance, a health savings account with company contribution, family and medical leave, flexible work schedules, paid holidays and flexible vacation time, as well as mental wellness access from Modern Health, which provides coaching and counseling services for employees and dependents in their household.
We provide comprehensive benefits and services that help meet the unique needs of our employees, including medical, dental, and vision insurance, a health savings account with company contribution, family and medical leave, flexible work schedules, paid holidays and flexible vacation time, as well as mental wellness access from Modern Health, which provides coaching and counseling services for employees and dependents in their household.
Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform inform our marketing investments and product development prioritization.
Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform help to inform our marketing investments and product development prioritization.
The Remittance Transfer Rule requirements include (1) a disclosure requirement to provide consumers sending funds internationally from the United States enhanced pre-transaction written disclosures and receipts; (2) an obligation to investigate and resolve certain errors, including errors that may be outside our control; and (3) an obligation to cancel certain transactions upon that have not been completed at a customer’s request.
The Remittance Transfer Rule requirements include: (1) a disclosure requirement to provide consumers sending funds internationally from the United States with pre-transaction written disclosures and receipts; (2) an obligation to investigate and resolve certain errors, including errors that may be outside our control; and (3) an obligation, upon a customer’s request, to cancel certain transactions that have not been completed.
Acquisition of Rewire On January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (O.S.G) Research and Development Ltd., a company organized under the laws of the State of Israel (“Rewire”), for approximately $77.0 million of aggregate consideration, the majority of which was or will be settled in cash, with the remaining consideration settled in Remitly equity.
Acquisition of Rewire On January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (O.S.G.) Research and Development Ltd., a company organized under the laws of the State of Israel (“Rewire”), for approximately $77.9 million of aggregate consideration, the majority of which was or will be settled in cash, with the remaining consideration settled or to be settled in Remitly equity.
In addition to numerous privacy and data security laws and regulations already in place, U.S. states are increasingly adopting laws imposing comprehensive privacy and data security obligations, which may be more stringent, broader in scope, or offer greater individual rights, with respect to personal information (including sensitive personal information) than foreign, federal, or other state laws and regulations, and such laws and regulations may differ from or conflict with each other.
In addition to numerous privacy and cybersecurity laws and regulations already in place, U.S. states are increasingly adopting laws imposing comprehensive privacy and cybersecurity obligations, which may be more stringent, broader in scope, or offer greater individual rights with respect to personal information (including sensitive personal information) than foreign, federal, or other state laws and regulations, and such laws and regulations may differ from or conflict with each other.
For example, as a result of our presence in Europe and our service offering in the European Union, we are subject to the EU General Data Protection Regulation (the “GDPR”), which imposes stringent privacy and data security requirements.
For example, as a result of our presence in Europe and our service offering in the European Union, we are subject to the EU General Data Protection Regulation (the “GDPR”), which imposes stringent privacy and cybersecurity requirements.
We regularly encounter attempts to create false or undesirable accounts or take other actions on our platform for purposes such as spamming, spreading misinformation, or other objectionable ends. Cyber-attacks may cause interruptions to our platform, degrade the user experience, cause users to lose confidence and trust in our platform, impair our internal systems, or result in financial harm to us.
We regularly encounter attempts to create false or undesirable accounts or take other actions on our platform for purposes such as spamming, spreading misinformation, or other objectionable ends. Cyberattacks may cause interruptions to our platform, degrade the user experience, cause users to lose confidence and trust in our platform, impair our internal systems, or result in financial harm to us.
Further corporate governance information, including our board committee composition and charters, code of business conduct and ethics, and corporate governance guidelines, is also available on our investor relations website under the heading “Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 11 Table of Contents
Further corporate governance information, including our board committee composition and charters, code of business conduct and ethics, and corporate governance guidelines, is also available on our investor relations website under the heading “Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 12 Table of Content s
These include laws, regulations, and supervisory guidance to detect and prevent money laundering and terrorist financing, including obligations to collect and maintain information about our users, recordkeeping, reporting and due diligence, and supervision of agents and sub-agents similar to, and in some cases exceeding, those required under the BSA.
These include laws, regulations, and supervisory guidance to detect and prevent money laundering and terrorist financing, including obligations to collect and maintain information about our users, recordkeeping, reporting, and due diligence and supervision of our counterparties similar to, and in some cases exceeding, those required under the BSA.
We further control the use of our proprietary technology and intellectual property through provisions in our terms of service. See the section titled “Risk Factors—Privacy, Data Security, Intellectual Property, and Technology Risks” for a more comprehensive description of risks related to our IP Rights. Privacy and Data Security Privacy Regulations .
We further control the use of our proprietary technology and intellectual property through provisions in our terms of service. See the section titled “Risk Factors—Cybersecurity, Privacy, Intellectual Property, and Technology Risks” for a more comprehensive description of risks related to our IP Rights. Privacy and Cybersecurity Privacy Regulations .
We have used, and intend to continue to use, the Investor Relations section of our website at https://ir.remitly.com as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We have used, and intend to continue to use, the Investor Relations section of our website at https://ir.remitly.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.
In addition, we rely upon a substantial amount of intellectual property licensed from third parties, including under certain open source licenses. We also seek to preserve the integrity and confidentiality of our IP Rights through contractual protections and appropriate technological restrictions, such as physical and electronic security measures.
In addition, we rely upon a substantial amount of intellectual property licensed from third parties, including under certain open source licenses. 8 Table of Content s We also seek to preserve the integrity and confidentiality of our IP Rights through contractual protections and appropriate technological restrictions, such as physical and electronic security measures.
We are focused on supporting our employees from recruitment and onboarding, to ongoing development, and have implemented programs designed to encourage engagement, and personal wellness. Our Culture and Values: Culture is the set of habits that allows a group of people to cooperate by assumption rather than by negotiation.
We are focused on supporting our employees from recruitment and onboarding, to ongoing development, and have implemented programs designed to encourage engagement and personal wellness. 10 Table of Content s Our Culture and Values . Culture is the set of habits that allows a group of people to cooperate by assumption rather than by negotiation.
We also own several domain names, including www.remitly.com. 7 Table of Contents We monitor our trademarks and service marks through watch services which notify us when applications for potentially conflicting marks have been filed in the United States and in other jurisdictions.
We also own several domain names, including www.remitly.com. We monitor our trademarks and service marks through watch services which notify us when applications for potentially conflicting marks have been filed in the United States and in other jurisdictions.
Specifically, we believe that our mobile-centric suite of products, our vast global network, our localization expertise at scale, and our data-driven approach create sustainable differentiation against competitors. 5 Table of Contents Regulatory Environment Our business is subject to a wide range of federal, state, and international laws, regulations, and supervisory guidance across the globe.
Specifically, we believe that our mobile-first suite of products, our vast global network, our localization expertise at scale, and our data-driven approach create sustainable differentiation against competitors. Regulatory Environment Our business is subject to a wide range of federal, state, and international laws, regulations, and supervisory guidance across the globe.
Our values are not stagnant. Every so often we take a step back to refresh our values, and we did so in 2022, with the goal of continuously improving as we grow to serve millions of new customers, attract exceptional employees, globalize, grasp opportunities and face challenges in our ever-changing world. Our cultural values define how we get things done.
Every so often we take a step back to refresh our values with the goal of continuously improving as we grow to serve millions of new customers, attract exceptional employees, globalize, grasp opportunities, and face challenges in our ever-changing world. Our cultural values define how we get things done.
For more information, see the section titled “Risk Factors—Legal and Compliance Risks.” We have developed and implemented a compliance program, including our anti-money laundering (“AML”) program, comprised of policies and procedures designed to comply with such regulatory framework as it applies to our business.
For more information, see the section titled “Risk Factors—Legal and Compliance Risks.” We have developed and implemented a compliance program, including our anti-money laundering (“AML”) and consumer protection programs, composed of policies and procedures designed to comply with such regulatory framework as it applies to our business.
Our Pledge 1% commitment publicly acknowledges our intent to give back and expand our social impact in order to sustainably further our mission to expand the financial inclusion of immigrants.
Our Pledge 1% commitment publicly acknowledges our intent to give back and expand our social impact in order to sustainably further our mission to expand the financial inclusion of immigrants and other global citizens.
We maintain a compliance program designed to ensure our compliance with applicable anti-bribery laws, regulations, and supervisory guidance. Money Transmission and Stored Value Licensing or Registration .
We maintain a compliance program designed to comply with applicable anti-bribery laws, regulations, and supervisory guidance. Money Transmission and Stored Value Licensing or Registration .
We are engaged in ongoing privacy and data security compliance and oversight efforts, including in connection with the requirements of privacy and data security laws, rules, regulations, industry standards, and other obligations.
We are engaged in ongoing privacy and cybersecurity compliance and oversight efforts, including in connection with the requirements of privacy and cybersecurity laws, rules, regulations, industry standards, and other obligations.
Many of these privacy and data security laws, rules and regulations are subject to change and uncertain and inconsistent interpretation and enforcement, and may conflict with one another, other requirements or obligations, or our practices of the features of our services.
Many of these privacy and cybersecurity laws, rules, and regulations are subject to change, have uncertain and inconsistent interpretation and enforcement, and may conflict with one another, other requirements or obligations, or our practices or the features of our services.
Our global network of funding and disbursement partnerships enables us to complete money transfers in over 4,300 corridors without the need to deploy local operations in each country. We are able to do this while complying with global and local licensing and regulatory requirements.
Our global network of funding and disbursement partnerships enables us to complete money transfers efficiently in over 5,000 corridors without the need to deploy local operations in each country. We are able to do this while complying with global and local licensing and regulatory requirements.
Today, Remitly is a leading digital financial services provider for immigrants and their families in over 170 countries around the world.
Today, Remitly is a leading digital financial services provider for immigrants, their families, and other global citizens in over 170 countries around the world.
Our customers are able to set up an account and start sending money to international recipients on our platform, generally within minutes. Recipients can receive funds in multiple ways using our diversified and global disbursement network. Our customers and their families can also track the status of their transactions in real time.
Our customers are able to set up an account and start sending money to international recipients on our platform, generally within minutes. Recipients can receive funds in multiple ways using our diversified and global disbursement network. Our customers can also track the status of their transactions as they are processed.
These rules also impose requirements for the safeguarding and proper destruction of such information through the issuance of data security standards or guidelines.
These rules also impose requirements for the safeguarding and proper destruction of such information through the issuance of cybersecurity standards or guidelines.
These entities are typically locally licensed businesses or regulated banks whom we believe are compliant with local laws. Unclaimed Property . We must also comply with unclaimed property laws in the United States and in other countries where we are licensed.
These entities are typically locally licensed businesses or regulated banks whom we believe are compliant with local laws. 7 Table of Content s Unclaimed Property . We must also comply with unclaimed property laws in the United States and in other countries where we are licensed.
For additional information about privacy and associated risks, see the section titled “Risk Factors—Privacy, Data Security, Intellectual Property, and Technology Risks.” Data Security.
For additional information about privacy and associated risks, see the section titled “Risk Factors—Cybersecurity, Privacy, Intellectual Property, and Technology Risks.” Cybersecurity.
Today, our customers predominately engage with us via their mobile phones, either using our app or website, shifting what traditionally required waiting in line to speak with an agent to the palm of their hands. Providing our customers with a convenient, easy, and safe mobile experience underpins our approach to product development, marketing, and customer success.
Today, our customers predominately engage with us via their mobile phones, either using our app or website, shifting what traditionally required waiting in line to speak with an agent to hand held devices. Providing our customers with a convenient, easy, and safe mobile experience underpins our approach to product development, marketing, and customer success.
In the United States, various federal, state and local laws, rules and regulations apply to the collection, disclosure, security and other processing of personal information, including the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Federal Trade Commission Act, the Gramm-Leach-Bliley Act (the “GLBA”), and various state laws and regulations relating to privacy and data security.
In the U.S., various federal, state, and local laws, rules, and regulations apply to the collection, disclosure, security, and other processing of personal information, including the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Federal Trade Commission Act, the Gramm-Leach-Bliley Act (the “GLBA”), and various state laws and regulations relating to privacy and cybersecurity.
In 2021 and 2022, we donated 181,961 shares of our common stock each year to the Remitly Philanthropic Fund. We also have a multifaceted social good program that aligns with our Pledge 1% philanthropic commitment. This includes: Corporate and Employee Giving.
From 2021 to 2023, we donated 181,961 shares of our common stock each year to the Remitly Philanthropic Fund. We also have a multifaceted social good program that aligns with our Pledge 1% philanthropic commitment. Corporate and Employee Giving.
The long-term, trusted relationships we foster with our customers have enabled us to expand our core cross-border remittance product to over 4,300 corridors worldwide and we are now working to offer complementary new products to our now 4.2 million quarterly active users. Our customers are at the heart of everything we do.
The long-term, trusted relationships we foster with our customers have enabled us to expand our core cross-border remittance product to over 5,000 corridors worldwide, and we are working to offer complementary new products to our 5.9 million quarterly active users. Our customers are at the heart of everything we do.
In addition, we only select disbursement partners that meet or exceed: (1) our geographic coverage goals in the markets in which they operate, (2) our robust compliance and regulatory requirements, and (3) our specific operating metrics such as credit worthiness and error rates. Certain of our funding and disbursement partnerships are multi-faceted.
In addition, we only select disbursement partners that meet or exceed: (1) our geographic coverage goals in the markets in which they operate; (2) our robust compliance and regulatory requirements; and (3) our specific operating metrics such as credit worthiness and error rates. As a result of our scale, we are able to establish multi-faceted partnerships.
These include, without limitation, India, Mexico, and the Philippines as well as other developing countries. These laws and regulations include strict requirements intended to help detect and prevent money laundering, terrorist financing, fraud, data misuse, theft and misappropriation, and other illicit activity.
These include India, Mexico, and the Philippines as well as other receive countries. These laws and regulations include strict requirements intended to help detect and prevent money laundering, terrorist financing, sanctioned persons and activity, fraud, data misuse, theft and misappropriation, and other illicit activity.
In several key jurisdictions, we have obtained licenses to operate as a money services business or payment institution, as applicable. In Canada, we are registered with the Financial Transactions and Reports Analysis Centre of Canada as a money services business.
In several key jurisdictions, we have obtained licenses or are registered to operate as a money services business or payment institution, as applicable. In Canada, we are registered with the Financial Transactions and Reports Analysis Centre of Canada as a money services business. In the United Kingdom, we have obtained a payment institution license from the Financial Conduct Authority.
In connection with certain licenses we hold in the United States, there are also different shareholding thresholds (as low as 10% or more of the total equity in the United States) that may require a shareholder to obtain regulatory approval prior to exceeding such thresholds. Outside the United States, we provide services to our customers in a variety of ways.
In connection with certain licenses we hold in the United States, there are also different shareholding thresholds that may require a shareholder to obtain regulatory approval prior to exceeding such thresholds. Outside the United States, we provide services to our customers in a variety of ways.
While we take reasonable efforts to secure our customers’ information, financial technology companies such as us are prone to cyber-attacks, data security breaches and other similar incidents by third parties seeking unauthorized access to our data or to disrupt our ability to provide access to our products and services.
While we take reasonable efforts to secure our customers’ information, financial technology companies such as us are prone to cyberattacks, cybersecurity breaches, service outages, and other similar incidents by third parties seeking unauthorized access to our data or to disrupt our ability to provide access to our products and services.
The acquisition of Rewire allows us to accelerate our opportunity to differentiate the remittance experience with complementary products, by bringing together our remittance businesses in new geographies, along with a strong team that is culturally aligned with Remitly. 2022 Key Performance Metrics The vast majority of our revenue today is generated through our remittance business, where we earn revenue 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.
The acquisition of Rewire allows us to accelerate our opportunity to differentiate the remittance experience with complementary products and expands our remittance businesses in new geographies all with a strong team that is culturally aligned with Remitly. 2023 Key Performance Metrics Substantially all of our revenue today is generated through our remittance business, where we earn revenue 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 our currency purchases.
Remitly’s culture is key to our success. Our cultural values act as a blueprint for how we get things done. In 2022, we refreshed our values as we do regularly to align with our strategy. The one constant, and single most important of these values is customer centricity , which serves as our north star in all that we do.
Remitly’s culture is key to our success, and our cultural values act as a blueprint for how we accomplish everything we do. We regularly refresh our values to align with our strategy. The one constant, and single most important of these values is customer centricity , which serves as our north star in all that we do.
As of December 31, 2022, we had over 2,700 full-time equivalent employees working out of our headquarters in Seattle, Washington, several other office locations, or remotely. None of our team members are represented by a labor union or are covered by a collective bargaining agreement.
As of December 31, 2023, we had over 2,700 full-time equivalent employees working out of our global offices, which includes our headquarters in Seattle, Washington, several other office locations, or remotely. None of our team members is represented by a labor union or is covered by a collective bargaining agreement.
We also monitor these areas closely to continue to adapt our business practices and strategies to help us comply with current and evolving regulatory environment. Anti-Money Laundering .
We also monitor these areas closely to continue to adapt our business practices and strategies to help us comply with the current and evolving regulatory environment. 6 Table of Content s Anti-Money Laundering .
As a larger participant in the market for international money transfers, we are subject to direct CFPB supervisory authority over our business. This includes the authority to fine and provide consumer restitution for violations, track and respond to consumer complaints, and request data. Indirect Regulatory Requirements .
As a larger participant in the market for international money transfers, we are subject to direct CFPB supervisory authority over our business. This includes the authority to fine and provide consumer restitution for violations and request information and data about our compliance activities. In addition, the CFPB requires that we track and respond to consumer complaints.
They also transform the local economies where they live and work, as well as the countries where they send money. Through Remitly’s charitable giving programs, we aspire to invest in and support the organizations and coalitions who are committed to improving the economic, financial and social inclusion of immigrants and their families.
They also transform the local economies where they live and work, as well as the countries where they send money. Through Remitly’s charitable giving programs, we aspire to invest in and support the organizations and coalitions who are committed to improving financial inclusion and community resiliency around the globe.
As of December 31, 2022, we owned six U.S. registered trademarks, one pending U.S. trademark application, 88 foreign registered trademarks and 40 pending foreign trademark applications covering the mark REMITLY, our collapsed Clasped Hand logo, REMITLY (+ Clasped Hand Logo), PASSBOOK BY REMITLY, and Hui Mei Yi (Remitly in Chinese characters).
As of December 31, 2023, we owned six U.S. registered trademarks, two pending U.S. trademark applications, 112 foreign registered trademarks, and 29 pending foreign trademark applications covering the mark REMITLY, our collapsed Clasped Hand logo, REMITLY (+ Clasped Hand Logo), PASSBOOK BY REMITLY, 汇安易 (Hui Mei Yi in Chinese characters), and 睿每易 (Rui Mei Yi in Chinese characters).
Traditional bank networks that offer a wide variety of financial services, including international remittances, but have limited disbursement options and may have burdensome KYC processes that do not cater to immigrant populations. • Digital-first cross-border payment providers.
Traditional bank networks that offer a wide variety of financial services, including international remittances, but have limited disbursement options and may have burdensome KYC processes that do not cater to immigrants or other global citizens. 5 Table of Content s • Digital-first cross-border payment providers.
We expect to leverage our data-driven approach to optimize our pricing, product features, marketing strategies, and customer economics as we expand and grow in these new geographies.
We expect to leverage our data-driven approach to optimize the value we deliver to our customers, product features, marketing strategies, and customer economics as we expand and grow to new geographies and customers.
Our 2022 key performance metrics included the following results: • Active customers for the fourth quarter of 2022 increased to 4.2 million, from 2.8 million, up 48% year over year. • Send volume for the year ended December 31, 2022 increased to over $28.6 billion, from $20.4 billion, up 40% year over year.
Our 2023 key performance metrics included the following results: • Active customers for the fourth quarter of 2023 increased to 5.9 million, from 4.2 million, up 41% year over year. • Send volume for the year ended December 31, 2023 increased to $39.5 billion, from $28.6 billion, up 38% year over year.
As a result of the quality of our network and the foundational investments we have made, in general every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly. 3 Table of Contents Our disbursement options within our global network continue to grow and remain an important driver of customer loyalty.
As a result of the quality of our network and the foundational investments we have made, in general every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly.
Remitly’s Cultural Values define our ideal behaviors and interactions. Each of us as individuals, teams, and as a company has strengths and growth opportunities. We view our values as a north star and, with a ‘growth mindset’, our aspiration to work towards.
Remitly’s cultural values define our ideal behaviors and interactions. Each of us as individuals, teams, and as a company has strengths and growth opportunities. We view our values as a north star and, with a ‘growth mindset,’ our aspiration to work towards. Our values give us a common language to guide our work, behavior, and decision making every day.
We select our disbursement partners based on our recipients’ preferences, quality of service, brand recognition, and co-branding opportunities. Our disbursement partners make us a trusted source of remittances because our customers are typically already familiar with their chosen disbursement partner and recipients feel comfortable receiving money where they regularly bank or shop.
Our disbursement partners make us a trusted source of remittances because our customers are typically already familiar with their chosen disbursement partner and recipients feel comfortable receiving money where they regularly bank or shop.
Diversity, Equity, and Inclusion . Diversity, Equity and Inclusion (“DEI”) is deeply rooted in our purpose and mission at Remitly. Our focus every day is to tirelessly deliver for our customers, many of whom may be underrepresented in the countries they've migrated to and have historically been left out of traditional financial systems.
Our focus every day is to tirelessly deliver for our customers, many of whom may be underrepresented in the countries they have migrated to and have historically been left out of traditional financial systems.
Bringing cash home when immigrants travel, trusting others to deliver cash back home, established networks of “IOUs” based on documentation or passwords, and other systems of trust-based cash transfers that evade tracking and regulation. Digital-first companies are increasingly gaining market share from legacy providers and traditional banks.
Bringing cash home when immigrants travel, trusting others to deliver cash back home, established networks of “IOUs” based on documentation or passwords, and other systems of trust-based cash transfers that evade tracking and regulation.
Our cultural values are used as a common language for feedback, recognition and candidate assessment. Our cultural values are also woven throughout our employee lifecycle processes including onboarding, performance management, and development planning, which help us to attract, inspire, and retain a world-class and globally diverse team. Learning and Development .
Our cultural values are woven throughout our employee lifecycle processes including onboarding, performance management, and development planning, which help us to attract, inspire, and retain a world-class and globally diverse team. Benefits and Compensation .
In just a few minutes, customers are able to set up and send money for the first time with Remitly, and repeat transactions become easier with just three taps. Our customers and their families can also track the status of their transactions in real time.
In just a few minutes, customers are able to set up and send money for the first time with Remitly, and repeat transactions are easier with just a few taps.
Additionally, we own common law trademark rights in the above-referenced marks as well as the REMITLY PROMISES DELIVERED (+ Clasped Hand Logo) and PASSBOOK BY REMITLY (+ Clasped Hand Logo) mark in the United States and certain other jurisdictions where common law rights are recognized.
We are pursuing additional trademark registrations to the extent we believe it would be beneficial and cost effective. Additionally, we own common law trademark rights in the above referenced marks as well as the REMITLY PROMISES DELIVERED (+ Clasped Hand Logo) mark in the United States and certain other jurisdictions where common law rights are recognized.
Over the last decade, we have strategically expanded our network in existing corridors to provide our customers with increasing disbursement options and in new corridors as part of our expansion strategy. A key focus of our global network strategy is continuing to expand the number of direct integrations with local partners.
Our Global Network Our global network of funding and disbursement partners is at the core of our business. Over the last decade, we have strategically expanded and improved the quality of our network in existing corridors to provide our customers with increasing disbursement options and in new corridors as part of our expansion strategy.
GDPR will not automatically incorporate changes made to the GDPR going forward (which would need to be specifically incorporated by the U.K. Government), which creates a risk of divergent parallel regimes and related uncertainty.
GDPR can result in fines up to the greater of £17.5 million or 4% of annual global revenues of the violator. However, the U.K. GDPR will not automatically incorporate changes made to the GDPR going forward (which would need to be specifically incorporated by the U.K. government), which creates a risk of divergent parallel regimes and related uncertainty.
While our global network spans across over 4,300 corridors around the world, we have plans to increase our reach to thousands of additional corridors. We see an opportunity to generate value by expanding our remittance services more broadly in this way.
We see an opportunity to generate value by expanding our cross-border financial services more broadly to additional customers and markets around the world. While our global network spans over 5,000 corridors, we have plans to increase our reach to thousands of additional corridors.
We believe our expertise in localizing our marketing, products, and customer support at scale is a key differentiator and enables us to provide customers with a personalized experience that drives peace of mind. Localization can mean many things.
We believe our expertise in localizing our marketing, products, and customer support at scale is a key differentiator and enables us to provide customers with a personalized experience that drives peace of mind while also delivering high returns on marketing and product investments. • Superior Technology Platform.
Our values give us a common language to guide our work, behavior and decision making every day. 9 Table of Contents Remitly’s culture is the foundation of our success. We invested in our culture and values the day we started this company more than a decade ago, and we will continue to invest for the decades to come.
Remitly’s culture is the foundation of our success. We invested in our culture and values the day we started this company more than a decade ago, and we will continue to invest for the decades to come. Our values are not stagnant.
We are subject to licensing and registration requirements in relation to our money transmission and stored value issuance activities on a state by state and federal basis in the United States and in almost every other jurisdiction from which our customers initiate transactions, including, but not limited to, Canada, the United Kingdom, and the EEA. 6 Table of Contents In the United States, we are registered as a Money Services Business with FinCEN and we hold licenses to operate as a money transmitter (or its equivalent) in 48 states where such licenses are required, as well as in the District of Columbia.
We are subject to licensing and registration requirements in relation to our money transmission and stored value issuance activities on a state by state and federal basis in the United States and in almost every other jurisdiction from which our customers initiate transactions, including, but not limited to, Canada, the United Kingdom, and the EEA.
GDPR, GLBA, CCPA, and other regulatory and legislative requirements will continue to require substantial investments, including investments in compliance processes and technical infrastructure. In addition, some countries are considering or have passed legislation implementing data security requirements, including requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.
In addition, some countries are considering or have passed legislation implementing cybersecurity requirements, including requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.
We have been able to drive efficiencies in new customer acquisition by focusing on elasticity testing, optimizing channel mix, and by increasing word of mouth and referrals driven by our increasing scale. • Expand our geographic footprint .
We have been able to drive efficiencies in new customer acquisition by focusing on elasticity testing, scaling search engine optimization, developing high-quality content, optimizing channel mix, deploying localized marketing campaigns, and by increasing word of mouth and referrals driven by our increasing scale and product enhancements.
Our diverse array of competitors generally falls into the following categories: • Incumbent providers with a scaled legacy footprint. Traditional providers with large networks of brick-and-mortar locations and agents around the world that have been slow to adopt digital solutions. • Traditional banks.
Traditional providers with large networks of brick-and-mortar locations and agents around the world, that have been slow to adopt digital solutions. • Traditional banks.
We completed the acquisition of Rewire in January 2023. Competition We have experienced and expect to continue to experience competition from a number of companies, including those who are well-established and may have greater resources, and those who may become meaningful competitors in the future.
Competition We have experienced and expect to continue to experience competition from a number of companies, including those who are well-established or who may have greater resources, and those who may become meaningful competitors in the future. Our competitors generally fall into the following categories: • Incumbent providers with a scaled legacy footprint.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur actual or perceived failure to comply with these laws could harm our business; • Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results; • Our platform is susceptible to fraud, and our business, reputation, financial condition and operating results could be harmed as a result; • Failure to comply with sanctions laws, anti-terrorist financing laws, anti-money laundering laws and similar laws associated with our activities outside of the United States, and anti-corruption laws could subject us to penalties and other adverse consequences; • We are exposed to the risk of loss or insolvency if our disbursement partners fail to disburse funds according to our instructions or were to become insolvent unexpectedly or funds are disbursed before customer funds are guaranteed to be sufficient; • If there is any material change of service terms or loss of coverage in our payment processors and disbursement network, our business could be harmed; • If our disbursement partners do not provide a positive recipient experience, our business would be harmed; • We may fail to maintain an effective system of internal controls over financial reporting and may not be able to accurately and timely report our financial results; • If one or more of our counterparties, including financial institutions, aggregators, and local cash pick-up institutions where we have cash on deposit, or our lenders and potential hedging counterparties, default on their financial or performance obligations to us or fail, we may incur significant losses; and • Fluctuations in currency exchange rates could harm our operating results and financial condition. 12 Table of Contents Business and Strategic Risks If we fail to retain or grow our customer base, number of payment corridors, or scope of send and receive countries, our business and operating results will be harmed.
Biggest changeOur actual or perceived failure to comply with these laws could harm our business; • Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results; • Failure to comply with sanctions laws, anti-terrorist financing laws, anti-money laundering laws, and similar laws associated with our activities outside of the United States, and anti-corruption laws could subject us to penalties and other adverse consequences; • We are exposed to the risk of loss or insolvency if our disbursement partners fail to disburse funds according to our instructions or were to become insolvent unexpectedly or funds are disbursed before customer funds are guaranteed to be sufficient; • If there is any material change of service terms or loss of coverage in our payment processors and disbursement network, our business could be harmed; • If our disbursement partners do not provide a positive recipient experience, our business would be harmed; • Risks associated with operations outside the United States and foreign currencies could adversely affect our business, financial condition, results of operations, and cash flows; • If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected; • If one or more of our counterparties, including financial institutions, aggregators, and local cash pick-up institutions where we have cash on deposit, or our lenders and potential hedging counterparties, default on their financial or performance obligations to us or fail, we may incur significant losses; and • Our customers and business operations are exposed to macroeconomic conditions and geopolitical forces in developing regions and regions that account for a significant amount of our send volume, which exposes us to risk of loss. 13 Table of Content s Business and Industry Risks We operate in a highly competitive and evolving market and may be unable to compete successfully against existing and future competitors which employ a variety of existing business models and technologies or new innovations.
Our history of net losses has also caused us to at times draw on our then-outstanding revolving lines of credit to satisfy our capital requirements and any inability to maintain or secure financing on satisfactory terms could materially and adversely impact our business.
Our history of net losses has also, at times, caused us to draw on our then-outstanding revolving lines of credit to satisfy our capital requirements and any inability to maintain or secure financing on satisfactory terms could materially and adversely impact our business.
Our payment system has been utilized for illegal, improper and fraudulent uses in the past and we cannot guarantee that our policies, procedures and internal controls, or insurance, would adequately protect our business, maintain our continued ability to operate in the jurisdictions that we serve, or our reputation, especially if such illegal, improper or fraudulent activities were discovered to have taken place on our platform in the future.
Our payment system has been utilized for illegal, improper, and fraudulent uses in the past, and we cannot guarantee that our policies, procedures, and internal controls, or insurance, would adequately protect our business, maintain our continued ability to operate in the jurisdictions that we serve, or protect our reputation, especially if such illegal, improper, or fraudulent activities were discovered to have taken place on our platform in the future.
Given the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our platform false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or other relevant sanctions authorities are located in a jurisdiction subject to comprehensive sanctions or an embargo by the United States or another country in which we operate or are licensed to do business, and such services may not be in compliance with applicable economic sanctions regulations.
Given the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our platform false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or other relevant sanctions authorities or are located in a jurisdiction subject to comprehensive sanctions or an embargo by the United States or another country in which we operate or are licensed to do business, and such services may not be in compliance with applicable economic sanctions regulations.
Regulators in every jurisdiction in which we operate have the power to restrict our operations or bring administrative or judicial proceedings against us (or our employees, representatives, agents and third-party service providers), which could result, among other things, in suspension or revocation of one or more of our licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action which could materially harm our reputation, results of operations and financial condition.
Regulators in every jurisdiction in which we operate have the power to restrict our operations or bring administrative or judicial proceedings against us (or our employees, representatives, and third-party service providers), which could result, among other things, in suspension or revocation of one or more of our Licenses, cease and desist orders, fines, civil penalties, criminal penalties, or other disciplinary action which could materially harm our reputation, results of operations, and financial condition.
As such, we may require additional capital to respond to business opportunities (including increasing the number of customers acquired or acquisitions), capital needed during high volume sending periods, new capital requirements introduced or required by our regulators and payment processors, challenges, or unforeseen circumstances and may determine to engage in equity or debt financings for other reasons.
As such, we may require additional capital to respond to business opportunities (including increasing the number of customers acquired or acquisitions), capital needed during high volume sending periods, new capital or liquidity requirements introduced or required by our regulators and payment processors, challenges, or unforeseen circumstances and may determine to engage in equity or debt financings for other reasons.
As we rely heavily on our servers, computer and communications systems, and the internet to conduct our business and provide high-quality customer service, disruptions in these systems could harm our ability to operate our business, impede our employees’ ability to conduct business activities whether at our facilities or from a remote location, and cause lengthy delays, which could harm our business, financial condition, and operating results.
As we rely heavily on our servers, computer and communications systems, and the internet to conduct our business and provide high-quality customer service, disruptions in these systems and networks could harm our ability to operate our business, impede our employees’ ability to conduct business activities whether at our facilities or from a remote location, and cause lengthy delays, which could harm our business, financial condition, and operating results.
Such formal or informal actions might force us to adopt new compliance programs or policies, remove personnel including senior executives, provide remediation or refunds to customers, or undertake other changes to our business operations. Any weaknesses in our compliance management system or Remittance Rule program may also subject us to penalties or enforcement action by the CFPB.
Such formal or informal actions might force us to adopt new compliance programs or policies, remove personnel including senior executives, provide remediation or refunds to customers, or undertake other changes to our business operations. Any weaknesses in our compliance management system or Remittance Transfer Rule program may also subject us to penalties or enforcement action by the CFPB.
Similarly, a failure to comply with the applicable regulations in various jurisdictions by our employees, representatives, agents and third-party service providers either in or outside the course of their services, or suspected or perceived failures by them, may result in further inquiries or investigations by regulatory and enforcement authorities and in additional regulatory or enforcement action against either us, or such employees, representatives, agents and third-party service providers.
Similarly, a failure to comply with the applicable regulations in various jurisdictions by our employees, representatives, and third-party service providers either in or outside the course of their services, or suspected or perceived failures by them, may result in further inquiries or investigations by regulatory and enforcement authorities and in additional regulatory or enforcement action against either us, or such employees, representatives, and third-party service providers.
Although we monitor our use of open source software to avoid subjecting our products and services to conditions we do not intend, such use could inadvertently occur, or could be claimed to have occurred, in part because open source license terms are often ambiguous.
Although we monitor our use of open source software to avoid subjecting our products and services to conditions we do not intend to accept, such use could inadvertently occur, or could be claimed to have occurred, in part because open source license terms are often ambiguous.
If our licenses are not renewed or we are denied licenses in additional states or jurisdictions where we choose to apply for a license, we could be forced to change our business practices or be required to bear substantial cost to comply with the requirements of the additional states or jurisdictions.
If our Licenses are not renewed or we are denied Licenses in additional jurisdictions where we choose to apply for a License, we could be forced to change our business practices or be required to bear substantial cost to comply with the requirements of the additional jurisdictions.
Our operations depend on protecting the cloud infrastructure hosted by such providers by maintaining their respective configuration, architecture, and interconnection specifications, as well as the information stored in these data centers and which third-party internet service providers transmit.
In addition, our operations depend on protecting the cloud infrastructure hosted by such providers by maintaining their respective configuration, architecture, and interconnection specifications, as well as the information stored in these data centers and which third-party internet service providers transmit.
This would harm our ability to attract new customers and could decrease the frequency with which existing customers use our website and mobile solutions. As a result, our business, financial results and operating results may be harmed.
This would harm our ability to attract new customers and could decrease the frequency with which existing customers use our website and mobile solutions. As a result, our business, reputation, financial results, and operating results may be harmed.
Our stock price and trading volume is heavily influenced by the way analysts and investors interpret our financial information and other disclosures. If industry analysts cease coverage of us, our stock price would be negatively affected.
Our stock price and trading volume is heavily influenced by the way analysts and investors interpret our financial information and other disclosures. If industry analysts cease coverage of us, our stock price would likely be negatively affected.
We have significant working capital requirements driven by: • the delay between when we release funds for disbursement and when we receive customer funds from our payment processors, which can be exacerbated by time zone differences, bank holidays, national or governmental holidays, and weekends; • regulatory capital requirements pertaining to net worth; • regulatory requirements pertaining to permissible investments and safeguarding of customer funds; • requirements contained in the credit agreement governing our New Revolving Credit Facility; • collateral requirements imposed on us by our payment processors; and • collateral requirements imposed on us by our disbursement partners.
We have significant working capital requirements driven by: • the delay between when we release funds for disbursement and when we receive customer funds from our payment processors, which can be exacerbated by time zone differences, bank holidays, national or governmental holidays, and weekends; • regulatory capital requirements pertaining to net worth; • regulatory requirements pertaining to permissible investments and safeguarding of customer funds; • requirements contained in the credit agreement governing our 2021 Revolving Credit Facility; • collateral requirements imposed on us by our payment processors; and • collateral requirements imposed on us by our disbursement partners.
We also face significant risks if we cannot comply with the FCPA and other anti-corruption laws that prohibit companies and their agents and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties, or private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage.
We also face significant risks if we cannot comply with the FCPA and other anti-corruption laws that prohibit companies and their third-party providers and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties, or private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage.
Overall growth of our revenue depends on a number of factors, including our ability to: • maintain the rates at which customers transact on our platform; • attract new customers; • expand the functionality and scope of the products we offer on our platform; • price our services competitively; • maintain high quality, highly available products; • maintain trust with our customers; • maintain send volume; • provide our customers with high-quality customer support that meets their needs; • introduce our services in new payment corridors and markets, including maintaining existing and obtaining new money transmitter licenses; • localize our services; 15 Table of Contents • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and • increase awareness of our brand and successfully compete with other companies.
Overall growth of our revenue depends on a number of factors, including our ability to: • maintain the rates at which customers transact on our platform; • attract new customers; • expand the functionality and scope of the products we offer on our platform; • price our services competitively; • maintain high-quality, highly available products; • maintain trust with our customers; • maintain send volume; • provide our customers with high-quality customer support that meets their needs; • introduce our services in new payment corridors and markets, including maintaining existing and obtaining new money transmitter licenses; • localize our services; • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and • increase awareness of our brand and successfully compete with other companies.
Additionally, if a payment processor experiences a service outage or service interruption that results in our being unable to collect funds from customers, our liquidity could be harmed and we may not meet our capital requirements. Our third-party partners also support our business operations and processes, including customer support services, from their various locations around the world.
Additionally, if a payment processor experiences a service outage or service interruption that results in our being unable to collect funds from customers, our liquidity could be harmed and we may not meet our capital or other regulatory requirements. Our third-party partners also support our business operations and processes, including customer support services, from their various locations around the world.
Our effective tax rate could increase due to several factors, including: • changes in the relative amounts of income before taxes in the various U.S. and international jurisdictions in which we operate due to differing statutory tax rates in various jurisdictions; • changes in tax laws, tax treaties, and regulations or the interpretations of them, including the 2017 Tax Act as modified by the CARES Act; 34 Table of Contents • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environment in which we do business; and • the outcome of current and future tax audits, examinations, or administrative appeals.
Our effective tax rate could increase due to several factors, including: • changes in the relative amounts of income before taxes in the various U.S. and international jurisdictions in which we operate due to differing statutory tax rates in various jurisdictions; • changes in tax laws, tax treaties, and regulations or the interpretations of them, including the 2017 Tax Act as modified by the CARES Act; • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environment in which we do business; and • the outcome of current and future tax audits, examinations, or administrative appeals.
There are significant costs and risks inherent in conducting business in international markets, including: • establishing and maintaining effective controls at international locations and the associated costs; • increased competition from local providers; • compliance with international laws and regulations, including privacy and data security frameworks similar to the GDPR; • adapting to doing business in other languages or cultures; • compliance with local tax regimes, including potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and international tax laws as they relate to our international operations; • compliance with anti-bribery laws, such as the FCPA, the CFPOA, and the U.K.
There are significant costs and risks inherent in conducting business in international markets, including: • establishing and maintaining effective controls at international locations and the associated costs; • increased competition from local providers; • compliance with international laws and regulations, including privacy and cybersecurity frameworks similar to the GDPR; • adapting to doing business in other languages or cultures; • compliance with local tax regimes, including potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and international tax laws as they relate to our international operations; • compliance with anti-bribery laws, such as the FCPA, the CFPOA, and the U.K.
In the event that AWS’ or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired and data may be compromised. All of the aforementioned risks may be augmented if our or our partners’ business continuity and disaster recovery plans prove to be inadequate.
In the event that any third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired and data may be compromised. All of the aforementioned risks may be augmented if our or our partners’ business continuity and disaster recovery plans prove to be inadequate.
We are also exposed to risks relating to fluctuations in currency exchange rates between the date on which a customer initiates a cross-border remittance payment and the date that the remittance recipient receive the funds through our disbursement partners because the foreign exchange rate quoted to the customer is not adjusted for changes between the initiation date and the settlement date.
We are also exposed to risks relating to fluctuations in currency exchange rates between the date on which a customer initiates a cross-border remittance payment and the date that the remittance recipient receives the funds through our disbursement partners because the foreign exchange rate quoted to the customer is not adjusted for changes between the initiation date and the settlement date.
We rely on, and expect to continue to rely on, a combination of intellectual property laws, technological restrictions, provisions in our terms of service and contractual provisions including confidentiality, invention assignment, and license agreements with our employees, contractors, consultants, and other third parties with whom we work, to establish and protect our brand, proprietary technology, and other IP Rights.
We rely on, and expect to continue to rely on, a combination of intellectual property laws, technological restrictions, provisions in our terms of service, and contractual provisions including confidentiality, invention assignment, and license agreements with our employees, contractors, consultants, and other third parties with whom we partner, to establish and protect our brand, proprietary technology, and other IP Rights.
In addition, we may not be able to meet new capital requirements introduced or required by our regulators and payment processors.
In addition, we may not be able to meet new capital or liquidity requirements introduced or required by our regulators and payment processors.
The credit agreement governing our New Revolving Credit Facility contains conditions to borrowing and significant restrictive covenants; any failure to satisfy these conditions to borrowing or covenants could result in us being unable to borrow additional amounts under the New Revolving Credit Facility or having to repay outstanding amounts, and could limit our ability to execute on our business or growth strategies.
The credit agreement governing our 2021 Revolving Credit Facility contains conditions to borrowing and significant restrictive covenants; any failure to satisfy these conditions to borrowing or covenants could result in us being unable to borrow additional amounts under the 2021 Revolving Credit Facility or having to repay outstanding amounts, and could limit our ability to execute on our business or growth strategies.
In addition, any perceived or actual breach of compliance by us, our customers, vendors, or our payment or disbursement partners with respect to applicable laws, rules, and regulations could have a significant impact on our reputation and could cause us to lose existing customers, prevent us from obtaining new customers, cause other payment or disbursement partners to terminate or not renew their agreements with us, require us to expend significant funds to remedy problems caused by violations and to avert further violations, adversely affect our relationship with our partner banks and other commercial counterparties and expose us to legal risk and potential liability, all of which may adversely affect our business, operating results, and financial condition and may cause the price of our common stock to decline.
In addition, any perceived or actual breach of compliance by us, our customers, vendors, or third-party providers (including our payment or disbursement partners) with respect to applicable laws, rules, and regulations could have a significant impact on our reputation and could cause us to lose existing customers, prevent us from obtaining new customers, cause other third-party providers (including payment or disbursement partners) to terminate or not renew their agreements with us, require us to expend significant funds to remedy problems caused by violations and to avert further violations, adversely affect our relationship with our partner banks and other commercial counterparties, and expose us to legal risk and potential liability, all of which may adversely affect our business, operating results, and financial condition and may cause the price of our common stock to decline.
To the extent we cannot effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology platform to maintain sufficient system availability, new or existing customers may seek other services and may not return to our services as often in the future, or at all.
To the extent we cannot effectively address capacity constraints, upgrade our systems, or implement redundant systems as needed, and continually develop our technology platform to maintain sufficient system availability, new or existing customers may seek other services and may not return to our services as often in the future, or at all.
Based upon the information available to us about our shares outstanding as of December 31, 2022, our executive officers, directors, and current beneficial owners of 5% or more of our common stock, in the aggregate, beneficially own a substantial percentage of our outstanding common stock.
Based upon the information available to us about our shares outstanding as of December 31, 2023, our executive officers, directors, and current beneficial owners of 5% or more of our common stock, in the aggregate, beneficially own a substantial percentage of our outstanding common stock.
For example, our controls, policies and procedures, including with respect to accounting, risk management, privacy, data security, client on-boarding, transaction monitoring and reliance on manual controls, among other compliance matters, remain under development and may not be consistently applied or fully effective to identify, monitor and manage all risks of our business as we continue to scale rapidly.
For example, our controls, policies, and procedures, including with respect to accounting, risk management, privacy, cybersecurity, client on-boarding, transaction monitoring, and reliance on manual controls, among other compliance matters, remain under development and may not be consistently applied or fully effective to identify, monitor, and manage all risks of our business as we continue to scale rapidly.
For additional discussion about privacy and the regulatory environment that we operate in, please see the section titled “Business—Privacy and Cybersecurity.” 17 Table of Contents Any significant interruption or failure of our system availability, including failure to successfully implement upgrades or new technologies to our mobile app or website, could adversely affect our business, financial, and operating results.
For additional discussion about privacy and the regulatory environment that we operate in, please see the section titled “Business—Privacy and Cybersecurity.” Any significant interruption or failure of our system availability, including failure to successfully implement upgrades or new technologies to our mobile app or website, could adversely affect our business, financial, and operating results.
In addition, the general state of telecommunications and infrastructure in some developing countries, including countries where we have a large number of transactions, creates operational risks for us and our disbursement partners. 23 Table of Contents Policy makers have also discussed potential legislation to add taxes to remittances from the United States to Mexico and/or other countries.
In addition, the general state of telecommunications and infrastructure in some developing countries, including countries where we have a large number of transactions, creates operational risks for us and our disbursement partners. 23 Table of Content s Policy makers have also discussed potential legislation to add taxes to remittances from the United States to Mexico and/or other countries.
Since a substantial portion of our send volume is exposed to the U.S. dollar, any deterioration in the value of the U.S. dollar, including as a result of macroeconomics factors, including inflation, could have a material impact on our business.
Since a substantial portion of our send volume is exposed to the U.S. dollar, any deterioration in the value of the U.S. dollar, including as a result of macroeconomic factors, including inflation, could have a material impact on our business.
We may be unable to update policies, procedures, or controls to timely and effectively address changes in applicable legal requirements or in our sanctions risk environment. In addition, U.S. policy makers have sought and may continue to seek heightened customer due diligence requirements on, or restrict, remittances from the United States to Mexico or other jurisdictions.
We may be unable to update policies, procedures, or controls to timely and effectively address changes in applicable legal requirements or in our sanctions risk environment. In addition, U.S. policy makers have sought and may continue to seek heightened customer due diligence requirements on, or restrict, remittances from the United States to certain jurisdictions.
We, or our employees, may from time to time, and as is common in the financial services industry, be the subject of inquiries, examinations or investigations that could lead to proceedings against us or our employees. 22 Table of Contents Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results.
We, or our employees, may from time to time, and as is common in the financial services industry, be the subject of inquiries, examinations, or investigations that could lead to proceedings against us or our employees. 22 Table of Content s Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results.
Federal Trade Commission guidelines with respect to misleading or deceptive advertising or marketing practices, the Telephone Consumer Protection Act of 1991, state banking laws that prohibit non-banks, including licensed money transmitters, from holding themselves out as banks or providing banking services, the CCPA, and other comprehensive state privacy and data security laws.
Federal Trade Commission guidelines with respect to misleading or deceptive advertising or marketing practices; the Telephone Consumer Protection Act of 1991, state banking laws that prohibit non-banks, including licensed money transmitters, from holding themselves out as banks or providing banking services; and the CCPA and other comprehensive state privacy and cybersecurity laws.
Our actual or perceived failure to comply with these obligations could harm our business. The various privacy and data security laws, rules, regulations, industry standards and other obligations with which we must comply, including with respect to technologies such as cloud computing, AI, machine learning, cryptocurrency, and blockchain technology, are complex and evolving.
Our actual or perceived failure to comply with these obligations could harm our business. The various privacy and cybersecurity laws, rules, regulations, industry standards, and other obligations with which we must comply, including with respect to technologies, such as cloud computing, AI, machine learning, cryptocurrency, and blockchain technology, are complex and evolving.
These marketing practices are subject to a variety of advertising and consumer protection laws and regulatory oversight both in the United States and in Canada, the EEA, the United Kingdom, Australia, Singapore and the other jurisdictions in which we do business. In the United States, some examples of applicable legislation include, among others, the CAN-SPAM Act of 2003, the U.S.
These marketing practices are subject to a variety of advertising and consumer protection laws and regulatory oversight in the United States, Canada, the United Kingdom, and the EEA, and the other jurisdictions in which we do business. In the United States, some examples of applicable legislation include, among others, the CAN-SPAM Act of 2003; the U.S.
We believe that our cash, cash equivalents, and funds available our revolving credit facility will be sufficient to meet our operating and capital requirements for at least the next twelve months.
We believe that our cash, cash equivalents, and funds available under our 2021 Revolving Credit Facility will be sufficient to meet our operating and capital requirements for at least the next twelve months.
Our business may suffer if any current or future licenses or other grants of rights to us terminate, if the licensors (or other applicable counterparties) fail to abide by the terms of the license or other applicable agreement, if the licensors fail to enforce the licensed IP Rights against infringing third parties, or if the licensed IP Rights are found to be invalid or unenforceable.
Our business may suffer if any current or future licenses or other grants of rights to us terminate, if the licensors (or other applicable counterparties) fail to abide by the terms of the license or other applicable agreement, if the licensors fail to maintain, protect, defend, or enforce the licensed IP Rights against infringing third parties, or if the licensed IP Rights are found to be invalid or unenforceable.
Any failure of these parties to implement and operate adequate privacy, data security, business continuity, fraud controls or other internal controls, or any failure of ours to identify and require remediation of weaknesses in these areas, could result in significant liability or financial loss to our customers and us.
Any failure of these parties to implement and operate adequate privacy, cybersecurity, business continuity, fraud controls, or other internal controls, or any failure of ours to identify and require remediation of weaknesses in these areas, could result in significant liability or financial loss to our customers and us.
Our fees, profit margins, and/or foreign exchange spreads may be reduced or limited because of regulatory initiatives and changes in laws and regulations or their interpretation and industry practices and standards that are either industry wide or specifically targeted at our Company.
Our fees, profit margins, and/or our ability to offer foreign exchange spreads may be reduced or limited because of regulatory initiatives and changes in laws and regulations or their interpretation and industry practices and standards that are either industry wide or specifically targeted at our Company.
Furthermore, while state statutes governing our money transmitter licenses vary, most require investors to receive the approval of, or provide notice to, the relevant licensing authority before exceeding a certain ownership threshold (as low as 10%), including indirect ownership, in a licensed money transmitter.
Furthermore, while state statutes governing our money transmitter licenses vary, most require investors to receive the approval of, or provide notice to, the relevant licensing authority before exceeding a certain ownership threshold, including indirect ownership, in a licensed money transmitter.
In addition, the failure by our customers to comply with reporting obligations in connection with transactions on our platform could result in regulatory inquiry, reputational damage and potential enforcement actions and additional reporting and withholding requirements. 33 Table of Contents We may not be able to secure additional financing in a timely manner, on satisfactory terms, or at all, to meet our future capital needs, which could impair our ability to execute on our business plan.
In addition, the failure by our customers to comply with reporting obligations in connection with transactions on our platform could result in regulatory inquiry, reputational damage, and potential enforcement actions and additional reporting and withholding requirements. 32 Table of Content s We may not be able to secure additional financing in a timely manner, on satisfactory terms, or at all, to meet our future capital needs, which could impair our ability to execute on our business plan.
In addition to the factors discussed in this Annual Report on Form 10-K, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • actual or anticipated fluctuations in our revenue and other operating results; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • negative publicity related to the real or perceived quality of our platform, as well as the failure to timely launch new products and services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry or newly public companies; 38 Table of Contents • announcement by us or our competitors of new products or services (including with respect to cryptocurrency or blockchain technology), commercial relationships, or significant technical innovations; • acquisitions, strategic partnerships, joint ventures, or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable or our business; • lawsuits threatened or filed against us, litigation involving our industry, or both; • developments or disputes concerning our or other parties’ products, services, or IP Rights; • changes in accounting standards, policies, guidelines, interpretations, or principles; • interpretations of any of the above or other factors by trading algorithms, including those that employ natural language processing and related methods to evaluate our public disclosures; • other events or factors, including those resulting from war, incidents of terrorism, natural disasters, pandemics, or responses to those events; • the expiration of contractual lock-up or market stand-off agreements; and • sales of shares of our common stock by us or our stockholders.
In addition to the factors discussed in this Annual Report on Form 10-K, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • actual or anticipated fluctuations in our revenue and other operating results; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • negative publicity related to the real or perceived quality of our platform, as well as the failure to timely launch new products and services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry or newly public companies; • announcement by us or our competitors of new products or services (including with respect to cryptocurrency or blockchain technology), commercial relationships, or significant technical innovations; • acquisitions, strategic partnerships, joint ventures, or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • lawsuits threatened or filed against us, litigation involving our industry, or both; • developments or disputes concerning our or other parties’ products, services, or IP Rights; • changes in accounting standards, policies, guidelines, interpretations, or principles; 35 Table of Content s • interpretations of any of the above or other factors by trading algorithms, including those that employ natural language processing and related methods to evaluate our public disclosures; • other events or factors, including those resulting from war, incidents of terrorism, natural disasters, pandemics, or responses to those events; and • sales of shares of our common stock by us, our directors and executive officers, or our stockholders.
The accuracy of our predictions with respect to transaction profits may be subject to greater variance in new or recently added corridors, as compared to our more established corridors. Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could harm our operating and financial results.
The accuracy of our predictions with respect to transaction profits may be subject to greater variance in new or recently added corridors, as compared to our more established corridors. 31 Table of Content s Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could harm our operating and financial results.
This could lead to our inability to move funds on a global and timely basis as required to pay transactions and receive settlement funds; loss of prefunded balances; or a breach in our regulatory capital requirements if we are unable to recover our funds; and • We maintain cash at commercial banks in the United States in amounts in excess of the Federal Deposit Insurance Corporation limit of $250,000.
This could lead to our inability to move funds on a global and timely basis as required to pay transactions and receive settlement funds; loss of prefunded balances; or a breach in our capital or other regulatory requirements if we are unable to recover our funds; and 27 Table of Content s • We maintain cash at commercial banks in the United States in amounts in excess of the Federal Deposit Insurance Corporation limit of $250,000.
Compliance with such laws, rules, regulations, industry standards and other obligations, including our policies and documentation, requires that we expend significant resources, and we cannot guarantee that we will be able to successfully comply with all such privacy and data security obligations, especially where they do or may in the future conflict with one another, nor can we predict the extent to which such new and evolving regulatory and legal requirements will impact our business strategies and the cost or availability of previously useful data, increase our potential liability, increase our compliance costs, require changes in business practices and policies, or otherwise adversely affect our business.
Compliance with such laws, rules, regulations, industry standards, and other obligations requires that we expend significant resources, and we cannot guarantee that we will be able to successfully comply with all such privacy and cybersecurity obligations, especially where they do or may in the future conflict with one another, nor can we predict the extent to which such new and evolving regulatory and legal requirements will impact our business strategies and the cost or availability of previously useful personal information, increase our potential liability and compliance costs, require changes in business practices and policies, or otherwise adversely affect our business.
Our analysis of the transaction profit that we expect a new customer to generate over his or her lifetime depends upon several estimates and assumptions, including whether a customer will send a second transaction, whether a customer will send multiple transactions in a month, the amount of money that a customer sends in a transaction and the predictability of a customer’s sending pattern.
Our analysis of the transaction profit that we expect a new customer to generate over their lifetime depends upon several estimates and assumptions, including whether a customer will send a second transaction, whether a customer will send multiple transactions in a month, the amount of money that a customer sends in a transaction, and the predictability of a customer’s sending pattern.
If the interest rate on New Revolving Credit Facility or any alternative financing were to increase, our operating results could be harmed, particularly because we rely on drawings under our line of credit to satisfy regulatory compliance requirements with respect to maintaining sufficient capital.
If the interest rate on 2021 Revolving Credit Facility or any alternative financing were to increase, our operating results could be harmed, particularly because we rely on drawings under our line of credit to satisfy regulatory compliance requirements with respect to maintaining sufficient capital and liquidity.
Regulators could also impose other regulatory orders, monetary penalties, or other sanctions on us. Any change to our business practices that makes our service less attractive to customers or prohibits use of our services by residents of a particular jurisdiction could decrease our transaction volume and harm our business.
Governmental authorities could also impose other orders, monetary penalties, or other sanctions on us. Any change to our business practices that makes our service less attractive to customers or prohibits use of our services by residents of a particular jurisdiction could decrease our transaction volume and harm our business.
We have implemented an anti-corruption compliance policy, but we cannot ensure that all of our employees, customers, and agents, as well as those contractors to which we outsource certain of our business operations, will not take actions in violation of our policies or agreements and applicable law, for which we may be ultimately held responsible. 24 Table of Contents Consequences for failing to comply with applicable rules and regulations could include fines, criminal and civil lawsuits, forfeiture of significant assets, or other enforcement actions.
We have implemented an anti-corruption compliance policy, but we cannot ensure that all of our employees, customers, and third-party providers, as well as those contractors to which we outsource certain of our business operations, will not take actions in violation of our policies or agreements and applicable law, for which we may be ultimately held responsible. 24 Table of Content s Consequences for failing to comply with applicable rules and regulations could include fines, criminal and civil lawsuits, forfeiture of significant assets, or other enforcement actions.
Although our systems have been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences, they remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks, public health crises, cyber-attacks, data security breaches or other similar incidents, human error, hardware or software defects or malfunctions (including defects or malfunctions of components of our systems that are supplied by third-party service providers), and similar events or disruptions.
Although our systems have been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences, they remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks, public health crises, cyberattacks, cybersecurity breaches, service outages, or other similar incidents, human error, hardware or software defects or malfunctions (including defects or malfunctions of components of our systems and networks that are supplied by third-party vendors and service providers), and similar events or disruptions.
A cyber-attack, data security breach or other similar incident breach could lead to any of the following: • monetary and other losses for us or our customers; • identity theft for our customers; • the inability to expand our business; • additional scrutiny, restrictions, fines or penalties from regulatory or governmental authorities; • loss of customers and customer confidence in our services; • declines in user growth or engagement; • on-going regulatory oversight, assessments and audits; • exposure to civil litigation (including civil claims, such as representative actions and other class action-type litigation); • orders to cease or change our processing of our data; • a breach of our contracts with lenders or other third parties; • termination of services provided to us; or • liquidity risks or a negative impact on our relationships with our financial services providers, including payment processors or relevant network organizations, such as Visa or MasterCard, disbursement partners, and other third parties.
A cyberattack, cybersecurity breach, service outage, or other similar incident could lead to, among other things, any of the following: • monetary and other losses for us or our customers; • identity theft for our customers; • the inability to expand our business; • additional oversight, assessments, audits, scrutiny, restrictions, fines, or penalties from regulatory or governmental authorities; • loss of customers and customer confidence in our services; • declines in user growth or engagement; • exposure to civil litigation (including civil claims, such as representative actions and other class action-type litigation); • orders to cease or change our processing of our data; • a breach of our contracts with lenders or other third parties; • termination of services provided to us; or • liquidity risks or a negative impact on our relationships with our financial services providers, including payment processors or relevant network organizations, such as Visa or Mastercard, disbursement partners, and other third parties.
Any failure to adequately protect or enforce our IP Rights, or significant costs incurred in doing so, could materially harm our business, prospects, financial condition and operating results.
Any failure to adequately obtain, maintain, protect, defend, or enforce our IP Rights, or significant costs incurred in doing so, could materially harm our business, prospects, financial condition, and operating results.
The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not such acquisitions are completed.
The pursuit of potentially material acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not such acquisitions are completed.
In the future, we may also identify additional third-party intellectual property and technologies that we may need to license or otherwise obtain rights to conduct our business, including to develop or commercialize new products and services. However, such licenses or other grants of rights may not be available on acceptable terms, or at all.
In the future, we may also identify additional third-party IP Rights that we may need to license or otherwise obtain rights to, in order to conduct our business, including to develop or commercialize new products and services. However, such licenses or other grants of rights may not be available on acceptable terms, or at all.
In addition, such licenses or other grants of rights may be non-exclusive, which could give our competitors access to the same intellectual property licensed to us.
In addition, such licenses or other grants of rights may be non-exclusive, which could give our competitors access to the same IP Rights licensed to us.
If the experience delivered by our disbursement partners to a recipient is deemed unsatisfactory for any reason, including because our disbursement partners are not properly trained to disburse money or deliver poor customer service, if wait times at our disbursement partners’ pick up locations are too long, or if cash pick-up locations are not located in convenient and safe locations and open for business at convenient times, customers may choose to not use our services in the future and our business would be harmed.
If the experience delivered by our disbursement partners to a recipient is deemed unsatisfactory for any reason, including because our disbursement partners are not properly trained to disburse money or deliver poor customer service, our disbursement partners’ compliance processes and approvals take longer than expected, the wait times at our disbursement partners’ pick-up locations are too long, or cash pick-up locations are not located in convenient and safe locations and open for business at convenient times, customers may choose to not use our services in the future and our business would be harmed.
Our failure to adequately address privacy and data security-related concerns, even if unfounded, or to comply with applicable laws, rules, regulations, industry standards and other obligations relating to privacy and data security could result in regulatory or government investigations, monetary penalties, fines, sanctions, claims, litigation (including civil claims, such as representative actions and other class action-type litigation), orders to cease or change our processing of our data, enforcement notices, assessment notices (for a compulsory audit), compensation or damages liabilities, increased cost of operations, changes to our business practices (including changes to the manner in which we transfer personal information between and among countries and regions in which we operate or the manner in which we provide our services and the geographical location or segregation of our relevant systems and operations), declines in user growth or engagement, diversion of internal resources and reputational damage, all of which could have a material adverse effect on our business, including how we collect, use and otherwise process personal information, and harm our business, operating results, and financial condition.
Our failure to adequately address privacy and cybersecurity-related concerns, even if unfounded, or to comply with applicable laws, rules, regulations, industry standards, and other obligations could result in regulatory or government investigations, monetary penalties, fines, sanctions, claims, litigation (including civil claims, such as representative actions and other class action-type litigation), orders to cease or change our processing of personal information, enforcement notices, assessment notices (for a compulsory audit), compensation or damages liabilities, increased cost of operations, changes to our business practices (including changes to the manner in which we transfer personal information between and among countries and regions in which we operate or the manner in which we provide our services and the geographical location or segregation of our relevant systems and operations), declines in user growth or engagement, or diversion of internal resources, all of which could have a material adverse effect on our business, reputation, financial condition, and operating results.
Budget shortfalls in the United States and many jurisdictions could lead other states and jurisdictions to impose similar fees and taxes, as well as increase unclaimed property obligations.
Budget shortfalls and anti-immigrant sentiment in the United States and many jurisdictions could lead other states and jurisdictions to impose similar fees and taxes, as well as increase unclaimed property obligations.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation or restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation or restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition. 38 Table of Content s Item 1B.
Failure by Remitly, our agents or their subagents, and service providers to comply with any of these requirements or their interpretation could result in the suspension or revocation of a license or registration required to provide money transfer, payment or foreign exchange services, the limitation, suspension, or termination of services, changes to our business model, loss of consumer confidence, the seizure of our assets, and/or the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services.
Failure by Remitly or our service providers to comply with any of these requirements or interpretation of them by governmental authorities could result in the suspension or revocation of a License required to provide money transfer, payment, or foreign exchange services; the limitation, suspension, or termination of services; changes to our business model; loss of consumer confidence; the seizure of our assets; and/or the imposition of civil and criminal penalties, including fines and restrictions on our ability to offer services.
If we were unable to refinance the New Revolving Credit Facility or enter into an alternative facility on similar terms, we may be unable to meet regulatory compliance requirements with respect to maintaining sufficient capital.
If we were unable to refinance the 2021 Revolving Credit Facility or enter into an alternative facility on similar terms, we may be unable to meet regulatory compliance requirements with respect to maintaining sufficient capital and liquidity.
In addition, an adverse outcome of a dispute may require us to pay substantial damages; cease making, licensing, or using solutions that are alleged to infringe, misappropriate, or otherwise violate the intellectual property of others; expend additional development resources to attempt to redesign our services or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements to obtain the right to use necessary technologies or intellectual property rights; and indemnify our disbursement partners and other third parties.
In addition, an adverse outcome of a dispute may require us to: pay substantial damages; cease making, licensing, or using products or services that are alleged to infringe, misappropriate, or otherwise violate the IP Rights of others; expend additional development resources to attempt to redesign our products and services or otherwise develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements to obtain the right to use necessary technologies or IP Rights; and indemnify our disbursement partners and other third parties with whom we partner.
Such regulatory actions or the need to obtain licenses, certifications or other regulatory approvals could impose substantial costs and involve considerable delay in the provision or development of our services in a given market, or could require significant and costly operational changes or prevent us from providing any services in a given market.
Such regulatory actions or the need to obtain Licenses could impose substantial costs and involve considerable delay in the provision or development of our services in a given jurisdiction, or could require significant and costly operational changes or prevent us from providing any services in a given jurisdiction.
If we are not able to innovate, improve existing products, and develop new products that achieve market acceptance, our growth, business, operating results, financial condition and future prospects could be materially and adversely affected. Our solution is a technology-driven platform that relies on innovation to remain competitive.
If we are not able to innovate, improve existing products, and develop new products that achieve market acceptance, our growth, business, operating results, financial condition, and future prospects could be materially and adversely affected. Our products and services rely on a technology-driven platform that requires innovation to remain competitive.
The evolving regulatory environment, including increased fees or taxes, regulatory initiatives, and changes in laws and regulations or their interpretation, industry practices and standards imposed by state, federal, or foreign governments, and expectations regarding our compliance efforts, is impacting the manner in which we operate our business, may change the competitive landscape, and is expected to continue to adversely affect our financial results.
The evolving policy and regulatory environment—including increased fees or taxes, regulatory initiatives, and changes in laws and regulations or their interpretation, industry practices and standards imposed by state, federal, or foreign governments, and expectations regarding our compliance efforts—impacts the manner in which we operate our business, may change the competitive landscape, and may adversely affect our financial results.
Further, our results of operations could be affected by changes in revenue mix and costs, together with numerous other factors, including: • fluctuations in demand for our services or pricing of our fees associated with our services; • our ability to attract new customers; • our ability to retain and grow engagement with our existing customers; • our ability to expand our relationships with our marketing, payment processing, disbursement, and banking partners, or identify and attract new strategic partners; • customer growth rates and the revenue derived from and quantity of existing customers retained; 31 Table of Contents • changes in customer preference for mobile-first services as a result of cyber-attacks, data security breaches or other similar incidents in the industry or privacy concerns, or other security or reliability concerns regarding our services; • changes in customers’ budgets and in the timing of their budget cycles and money transfer decisions; • potential and existing strategic partners choosing our competitors’ products or developing their own solutions in-house; • the development or introduction of new platforms or services by our competitors that are easier to use or more advanced than our current suite of services, especially in respect of the application of AI-based services; • our failure to adapt to new forms of payment that become widely accepted, including cryptocurrency; • cyber-attacks, data security breaches, technical difficulties, interruptions or other similar incidents with respect to the delivery and use of our platform which may result in data theft and/or misappropriation; • the adoption or retention of more entrenched or rival services in the international markets where we compete; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly technology and development and marketing expenses; • the amount and timing of noncash expenses, including stock-based compensation expense, depreciation and amortization, and other noncash charges; • the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees; • fluctuation in market interest rates, which impacts interest earned on funds held for customers; • fluctuation in currency exchange rates; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market; and • awareness of our brand and our reputation in our target markets.
Further, our results of operations could be affected by changes in revenue mix and costs, together with numerous other factors, including: • fluctuations in demand for our services or pricing of our fees associated with our services; • our ability to attract new customers; • our ability to retain and grow trust and engagement with our existing customers; • our ability to expand our relationships with our marketing, payment processing, disbursement, and banking partners, or identify and attract new strategic partners; • customer growth rates and the revenue derived from and quantity of existing customers retained; • changes in customer preference for mobile-first services as a result of cyberattacks, cybersecurity breaches, service outages, or other similar incidents in the industry or privacy concerns, or other security or reliability concerns regarding our services; • changes in customers’ budgets and in the timing of their budget cycles and money transfer decisions; • potential and existing strategic partners choosing our competitors’ products or developing their own solutions in-house; • the development or introduction of new platforms or services by our competitors that are easier to use or more advanced than our current suite of services, especially in respect of the application of AI-based services; 30 Table of Content s • our failure to adapt to new forms of payment that become widely accepted, including cryptocurrency; • cyberattacks, cybersecurity breaches, service outages, or other similar incidents with respect to the delivery and use of our platform which may result in data theft and/or misappropriation; • the adoption or retention of more entrenched or rival services in the international markets where we compete; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly technology and development and marketing expenses; • the amount and timing of noncash expenses, including stock-based compensation expense, depreciation and amortization, and other noncash charges; • the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees; • fluctuation in market interest rates, which impacts interest earned on funds held for customers; • fluctuation in currency exchange rates; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • epidemics, pandemics, or other public health crises, such as the COVID-19 pandemic; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market; • awareness of our brand and our reputation in our target markets; and • our ability to introduce our services in new payment corridors and markets, including maintaining existing and obtaining new money transmitter licenses.
We have experienced transaction losses of $41.9 million, or 0.15%, $29.7 million, or 0.15%, and $17.2 million, or 0.14%, of total send volume in connection with such errors, fraud, and misconduct in the years ended December 31, 2022, 2021, and 2020, respectively. We expect that losses of similar or greater magnitude may occur again in the future.
We have experienced transaction losses of $39.0 million, or 0.10%, $41.9 million, or 0.15%, and $29.7 million, or 0.15%, of total send volume in connection with such errors, fraud, and misconduct in the years ended December 31, 2023, 2022, and 2021, respectively. We expect that losses of similar or greater magnitude may occur again in the future.
If federal, state, or international regulators were to take actions that interfered with our ability to transfer money reliably including if they attempted to seize transaction funds, to limit or prohibit us, our payment processors, or our disbursement partners from transferring money in certain countries, whether by imposing sanctions or otherwise such actions could harm our business.
If any governmental authority were to take actions that interfered with our ability to transfer money reliably—including if they attempted to seize transaction funds or to limit or prohibit us, our payment processors, or our disbursement partners from transferring money in certain countries, whether by imposing sanctions or otherwise—such actions could harm our business.
Our amended and restated certificate of incorporation and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; • provide that vacancies on our board of directors may be filled only by a majority vote of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; • provide that vacancies on our board of directors may be filled only by a majority vote of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation. 36 Table of Content s These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
However, since inception through December 31, 2022 and December 31, 2021, the Company has incurred losses from operations, negative cash flows from operations, and had an accumulated deficit of $373.5 million and of $259.4 million, respectively, and has been dependent on equity and debt financing to fund operations.
However, since inception through December 31, 2023 and December 31, 2022, the Company has incurred losses from operations, negative cash flows from operations, and had an accumulated deficit of $491.3 million and of $373.5 million, respectively, and has been dependent on equity and debt financing to fund operations.
Third parties from whom we currently license intellectual property and technology could refuse to renew our agreements upon their expiration or could impose additional terms and fees that we otherwise would not deem acceptable requiring us to obtain the intellectual property or technology from another third party, if any is available, or to pay increased licensing fees or be subject to additional restrictions on our use of such third party intellectual property or technology.
Third parties from whom we currently license IP Rights could refuse to renew our agreements upon their expiration or could impose additional terms and fees that we otherwise would not deem acceptable requiring us to obtain IP Rights from another third party, if any are available, or to pay increased licensing fees or be subject to additional restrictions on our use of such third-party IP Rights.
In addition, the trend towards working from home and using private residential networks to access the internet may further exacerbate risks associated with cyber-attacks, data security breaches and other similar incidents as private work environments and electronic connections to our work environment may not have the same security measures deployed in our offices.
In addition, the trend towards working from home and using private residential networks to access the internet may further exacerbate risks associated with cyberattacks, cybersecurity breaches, service outages, and other similar incidents as private work environments and electronic connections to our work environment may not have the same security measures deployed in our offices.
We have experienced rapid growth in recent periods in both our headcount and transaction volume, both of which place substantial demands on our management and operational resources. We will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures to manage this growth.
We have experienced rapid growth in recent periods in our headcount, licensing portfolio, geographic footprint, and transaction volume, all of which place substantial demands on our management and operational resources. We will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures to manage this growth.
In addition, the broader financial services sector is experiencing rapid evolution in technologies and there has recently been significant advancement in the development of neobanking and the exchange of digital assets, or cryptocurrency, as well as other real time payment technologies.
In addition, the broader financial services sector is experiencing rapid evolution in technologies and there has recently been significant advancement in the development of neobanking, as well as other real time payment technologies.
From time to time, we may be subject to legal proceedings, disciplinary actions, regulatory disputes, and governmental investigations that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.
From time to time, we may be subject to legal proceedings, disciplinary actions, regulatory disputes, and governmental investigations that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results. We may be involved in various legal proceedings, claims, investigations, or similar matters from time to time.
In addition, we have limited experience in acquiring other businesses, and we may not successfully identify desirable acquisition targets, identify key risks during the due diligence phase, or, if we acquire additional businesses, we may not be able to integrate them effectively following the acquisition.
In addition, we have limited experience in acquiring other businesses, and we may not successfully identify desirable acquisition targets, identify key risks during the due diligence phase, or integrate them effectively following the acquisition.
Furthermore, governmental agencies both in the United States and worldwide may impose new or additional rules on money transfers affecting us, our agents, partner banks or commercial counterparties, including regulations that: • prohibit, restrict, and/or impose taxes or fees on remittance transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose additional customer identification and customer, agent, subagent due diligence, and vendor management requirements; • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing remittance services, impose additional licensing or registration requirements on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our agents or their subagents; 21 Table of Contents • impose minimum capital or other financial requirements on us or our agents and their subagents; • limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange; • require additional consumer protection rights to our customers (including enhanced disclosures); • require the principal amount of money originated in a country to be invested in that country or held in a trust until they are paid; • limit the number or principal amount of remittances, which may be sent to or from a jurisdiction, whether by an individual, through one agent, or in aggregate; • impose more stringent information technology, data security, privacy, and operational security requirements on us or our agents and their subagents, including relating to data transfers and the use of cloud infrastructure; • impose additional risk management and related governance and oversight requirements, including relating to the outsources of services to other group companies or to third parties; and • prohibit or limit exclusive arrangements with our agents and subagents.
Furthermore, governmental agencies both in the United States and worldwide may impose new or additional rules on money transfers affecting us; our third-party providers, including our payment processors and disbursement partners; partner banks; or commercial counterparties, including regulations that: • prohibit, restrict, and/or impose taxes or fees on remittance transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose new requirements, change requirements, or re-interpret existing requirements regarding the acquisition of local currency for disbursement to recipients; • impose additional customer identification and customer or third-party provider due diligence, and vendor management requirements; • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing remittance services, impose additional licensing or registration requirements on us, our a third-party providers, or impose additional requirements on us with regard to selection or oversight of our third-party providers; • impose minimum capital or other financial requirements on us or our third-party providers; • limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange; 21 Table of Content s • require additional consumer protection rights to our customers (including enhanced disclosures and ‘treating customers fairly’ rules and consumer duties); • require the principal amount of money originated in a country to be invested in that country or held in a trust until they are paid; • limit the number or principal amount of remittances, which may be sent to or from a jurisdiction, whether by an individual, through one third-party provider, or in aggregate; • impose more stringent information technology, cybersecurity, privacy, and operational security requirements on us or our third-party providers and their service providers, including relating to data transfers and the use of cloud infrastructure; • impose additional risk management and related governance and oversight requirements, including relating to the outsources of services to other group companies or to third parties; and • prohibit or limit exclusive arrangements with our third-party providers.
Additionally, the majority of our customers access our products through our mobile website and mobile app, and we must ensure that our offerings are optimized for mobile devices and that our mobile apps are interoperable with popular third-party mobile operating systems such as Google Android and Apple iOS.
See the section titled “Risk Factors—General Risks.” Additionally, the majority of our customers access our products through our mobile website and mobile app, and we must ensure that our offerings are optimized for mobile devices and that our mobile apps are interoperable with popular third-party mobile operating systems such as Google Android and Apple iOS.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOther significant leased properties include facilities in Nicaragua, the United Kingdom, the Philippines, Poland, Ireland, and Singapore. We use these facilities for administration, finance, legal, human resources, IT, marketing software engineering, and customer success. 39 Table of Contents We maintain other leased facilities throughout the world. We intend to procure additional space as we add employees and expand geographically.
Biggest changeOther significant leased properties include facilities in Israel, Nicaragua, the United Kingdom, the Philippines, Poland, Ireland, and Singapore. We use these facilities for administration, finance, legal, human resources, IT, marketing, software engineering, and customer service. 39 Table of Content s We maintain other leased facilities throughout the world.
Item 2. Properties As of December 31, 2022, we occupied facilities in various countries. Substantially all these facilities were leased. Our corporate headquarters are located in Seattle, Washington, where we occupy facilities totaling approximately 48,412 square feet under a lease that expires in June 2025.
Item 2. Properties As of December 31, 2023, we occupied facilities in various countries. Substantially all these facilities were leased. Our corporate headquarters are located in Seattle, Washington, where we occupy facilities totaling approximately 48,412 square feet under a lease that expires in June 2025.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.
We intend to procure additional space as we add employees and expand geographically. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal or regulatory proceedings and claims in the ordinary course of business, including intellectual property, privacy, data security, commercial, product liability, employment, class action, whistleblower, and other litigation and claims, as well as governmental and other regulatory investigations and proceedings.
Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal or regulatory proceedings and claims in the ordinary course of business, including intellectual property, privacy, cybersecurity, commercial, product liability, employment, class action, whistleblower, and other litigation and claims, as well as governmental and other regulatory investigations and proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeConcurrently, 5,162,777 shares were sold by certain of our existing stockholders. In addition, the Company concurrently issued 581,395 shares of common stock 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.
Biggest changeUse of Proceeds In September 2021, we completed the IPO, in which we issued and sold 7,000,000 shares of our common stock at $43.00 per share. Concurrently, 5,162,777 shares were sold by certain of our existing stockholders. In addition, the Company concurrently issued 581,395 shares of common stock in a private placement at the same offering price as the IPO.
The following data and graph show a comparison of the cumulative total shareholder return for our common stock, the Russell 2000 Growth Index and the KBW NASDAQ Financial Technology Index from September 23, 2021 through December 31, 2022. This data assumes simultaneous investments of $100 on September 23, 2021 and reinvestment of any dividends.
The following data and graph show a comparison of the cumulative total shareholder return for our common stock, the Russell 2000 Growth Index and the KBW NASDAQ Financial Technology Index from September 23, 2021 through December 31, 2023. This data assumes simultaneous investments of $100 on September 23, 2021 and reinvestment of any dividends.
Dividend Policy We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our capital stock in the foreseeable future.
Dividends We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our capital stock in the foreseeable future.
As of February 24, 2023, there were 34 stockholders of record of our common stock. The actual number of stockholders is significantly greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Holders As of February 21, 2024, there were 24 stockholders of record of our common stock. The actual number of stockholders is significantly greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on September 24, 2021 pursuant to Rule 424(b) under the Securities Act. The managing underwriters of our IPO were Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on September 24, 2021 pursuant to Rule 424(b) under the Securities Act. 42 Table of Content s
The stockholder return shown in the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.
The stockholder return shown in the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans see “Item 12.
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.
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.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters” of this Annual Report on Form 10-K. Recent Sales of Unregistered Equity Securities None. Issuer Purchase of Equity Securities None. Use of Proceeds In September 2021, we completed the IPO, in which we issued and sold 7,000,000 shares of our common stock at $43.00 per share.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters” of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None. 41 Table of Content s Issuer Purchase of Equity Securities None.
Removed
Company Index 9/23/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Remitly Global, Inc. $ 100.00 $ 75.75 $ 42.56 $ 20.37 $ 15.81 $ 22.95 $ 23.63 Russell 2000 Growth Index $ 100.00 $ 95.97 $ 95.87 $ 83.65 $ 67.44 $ 67.48 $ 70.11 KBW Financial Technology Index $ 100.00 $ 97.70 $ 97.25 $ 87.25 $ 67.05 $ 64.38 $ 66.19 41 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans see “Item 12.
Removed
No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, in connection with the issuance and sale of the securities registered. 42 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 59 Report of Independent Registered Public Accounting Firm 60 Consolidated Balance Sheets 62 Consolidated Statement s of Operations 63 Consolidated Statement s of Comprehensive Loss 64 Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) 65 Consolidated Statemen t s of Cash Flows 67 Notes to Consolidated Financial Statements 68
Biggest changeFinancial Statements and Supplementary Data 58 Report of Independent Registered Public Accounting Firm 59 Consolidated Balance Sheets 61 Consolidated Statement s of Operations 62 Consolidated Statement s of Comprehensive Loss 63 Consolidated Statements of Stockholders’ Equity (Deficit) and Redeemable Convertible Preferred Stock 64 Consolidated Statemen t s of Cash Flows 66 Notes to Consolidated Financial Statements 67
Item 6. Reserved Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8.
Item 6. Reserved Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Net loss $ (114,019) $ (38,756) $ (32,564) Add: Interest expense, net (2,847) 1,116 916 Provision for income taxes 1,043 1,043 1,163 Depreciation and amortization expenses 6,724 5,256 4,060 Foreign exchange (gain) loss (5,261) (3,125) 1,302 Donation of common stock 1,972 6,933 — Stock-based compensation expense, net 95,293 17,016 5,264 Transaction costs 3,462 — — Adjusted EBITDA $ (13,633) $ (10,517) $ (19,859) Adjusted EBITDA declined to $(13.6) million for the year ended December 31, 2022, compared to $(10.5) million for the year ended December 31, 2021.
Biggest changeThe restructuring costs are primarily related to severance and other associated costs; and • other companies, including companies in our industry, may calculate Adjusted EBITDA differently from how we calculate this measure or not at all, which reduces its usefulness as a comparative measure. 51 Table of Content s The following table sets forth a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated: Years Ended December 31, (in thousands) 2023 2022 2021 Net loss $ (117,840) $ (114,019) $ (38,756) Add: Interest (income) expense, net (5,095) (2,847) 1,116 Provision for income taxes 5,902 1,043 1,043 Depreciation and amortization 13,118 6,724 5,256 Foreign exchange loss (gain) 2,603 (5,261) (3,125) Donation of common stock (1) 4,600 1,972 6,933 Stock-based compensation expense, net 136,967 95,293 17,016 Acquisition, integration, restructuring, and related costs (2) 4,197 3,462 — Adjusted EBITDA $ 44,452 $ (13,633) $ (10,517) __________________ (1) Refer to Note 11.
For example, as the U.S. dollar strengthens, we see customers in certain markets taking advantage of the ability to get more local currency to their families and friends. We also believe the strength of the U.S. dollar and the strength in other developed market currencies versus emerging market currencies make it easier to acquire new customers in certain markets.
For example, as the U.S. dollar strengthens, we see customers in certain markets taking advantage of the ability to get more local currency to their families and friends. We also believe the strength of the U.S. dollar and the strength of other developed market currencies versus emerging market currencies make it easier to acquire new customers in certain markets.
The increase in marketing expenses was also driven by a $2.2 million increase in other indirect marketing, a $0.5 million increase in professional fees, $0.5 million increase in software costs, and a $0.4 million increase in employee-related expenses, partially offset by a $0.1 million decrease in other operating expenses.
The increase in marketing expenses was also driven by a $2.2 million increase in other indirect marketing, a $0.5 million increase in professional fees, a $0.5 million increase in software costs, and a $0.4 million increase in employee-related expenses, partially offset by a $0.1 million decrease in other operating expenses.
Application of these approaches and methodologies involved the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable public companies, and the probability of and timing associated with possible future events, at the time of such historical grants prior to our IPO.
Application of these approaches and methodologies involved the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, future cash flows, discount rates, market multiples, the selection of comparable public companies, and the probability of and timing associated with possible future events, at the time of such historical grants prior to our IPO.
These factors evolve over time and periods of significant currency appreciation or depreciation, whether in send or receive currencies, changes to global migration patterns, and changes to digital adoption trends may shift the timing and volume of transactions, or the number of customers using our service. In addition, foreign currency movements do impact our business in numerous ways.
These factors evolve over time, and periods of significant currency appreciation or depreciation, whether in send or receive currencies, changes to global migration patterns, and changes to digital adoption trends may shift the timing and volume of transactions, or the number of customers using our service. In addition, foreign currency movements impact our business in numerous ways.
We measure active customers to monitor the growth and performance of our customer base. The majority of our active customers send money for recurring, non-discretionary needs multiple times per month, providing a reoccurring revenue stream with high visibility and predictability.
We measure active customers to monitor the growth and performance of our customer base. The majority of our active customers send money for recurring, non-discretionary needs multiple times per month, providing a recurring revenue stream with high visibility and predictability.
These fees paid to payment processors and other financial institutions are recognized as ‘ Transaction expenses ’ within the Consolidated Statements of Operations. We do not have any deferred contract acquisition costs. Stock-Based Compensation We account for stock-based compensation expense by calculating the estimated fair value of each employee and nonemployee award at the grant date or modification date.
These fees paid to payment processors and other financial institutions are recognized as ‘ Transaction expenses ’ within the Consolidated Statements of Operations. We do not have any capitalized contract acquisition costs. Stock-Based Compensation We account for stock-based compensation expense by calculating the estimated fair value of each employee and nonemployee award at the grant date or modification date.
We account for revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers , which includes the following steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, we satisfy a performance obligation.
We account for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , which includes the following steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, we satisfy a performance obligation.
In addition, on January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (as defined herein) for approximately $77.0 million which includes the fair value of cash and equity issued, or to be issued, to selling shareholders.
In addition, on January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (as defined herein) for approximately $77.9 million, which includes the fair value of cash and equity issued, or to be issued, to selling shareholders.
Off-Balance Sheet Arrangements As of December 31, 2022, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Off-Balance Sheet Arrangements As of December 31, 2023, we had no material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
After the completion of the IPO, the fair value of our common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the NASDAQ. For further disclosure of the assumptions used in determining the grant date fair value of stock-based awards, refer to Note 10 .
After the completion of the IPO, the fair value of our common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the NASDAQ. For further disclosure of the assumptions used in determining the grant date fair value of stock-based awards, refer to Note 13 .
You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-K. Overview Remitly is a leading digital financial services provider for immigrants and their families in over 170 countries around the world.
You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-K. Overview Remitly is a leading digital financial services provider for immigrants, their families, and other global citizens in over 170 countries around the world.
These limitations include the following: • although depreciation and amortization are noncash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us; • Adjusted EBITDA does not reflect the effect of gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency; • Adjusted EBITDA excludes noncash charges associated with the donation of our common stock in connection with our Pledge 1% commitment, which is recorded in general and administrative expense; • Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; 52 Table of Contents • Adjusted EBITDA excludes certain transaction costs, primarily acquisition and integration expenses related to the pending Rewire acquisition.
These limitations include the following: • although depreciation and amortization are noncash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us; • Adjusted EBITDA does not reflect the effect of gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency; • Adjusted EBITDA excludes noncash charges associated with the donation of our common stock in connection with our Pledge 1% commitment, which is recorded in general and administrative expenses; • Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Adjusted EBITDA excludes certain transaction costs, related to acquisition, integration, restructuring, and related costs.
Technology and Development Technology and development expenses consist primarily of personnel-related expenses for employees involved in the research, design, development and maintenance of both new and existing products and services, including salaries, benefits and stock-based compensation expense and legal fees.
Technology and Development Technology and development expenses consist primarily of personnel-related expenses for employees involved in the research, design, development, and maintenance of both new and existing products and services, including salaries, benefits, and stock-based compensation expense.
Also affecting the net cash used in operating activities was a net loss of $114.0 million, substantially offset by $104.4 million of noncash charges included within net loss for the period.
Also affecting the net cash used in operating activities was a net loss of $114.0 million, substantially offset by $104.3 million of noncash charges included within net loss for the period.
The number of business days in a quarter and the day of week that the last day of the quarter falls on may also introduce variability in our results, working capital balances, or cash flows period over period. 44 Table of Contents Our Technology Platform We will continue to invest significant resources in our technology platform.
The number of business days in a quarter and the day of week that the last day of the quarter falls on may also introduce variability in our results, working capital balances, or cash flows period over period. Our Technology Platform We will continue to invest significant resources in our technology platform.
These models and processes allow us to achieve and maintain fraud loss rates within desired guardrails, as well as tailor our risk models to target other illegitimate activity.
These models and processes allow us to achieve and maintain fraud loss rates within desired guardrails, as well as tune our risk models to target other illegitimate activity.
Components of Results of Operations Revenue The Company’s revenue is generated on transaction fees charged to customers and foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on the Company's currency purchases.
Components of Results of Operations Revenue Our revenue is generated on transaction fees charged to customers and foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases.
As a percentage of revenue, customer support and operations expenses remained flat at 10% for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
As a percentage of revenue, customer support and operations expenses remained flat at 10% for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
Adjusted EBITDA is calculated as net loss adjusted by (i) interest expense, net; (ii) provision for income taxes; (iii) noncash charge of depreciation and amortization; (iv) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency; (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, (vi) noncash stock-based compensation expense, net; and (vii) certain transaction and integration costs associated with acquisitions.
Adjusted EBITDA is calculated as net loss adjusted by (i) interest (income) expense, net; (ii) provision for income taxes; (iii) noncash charge of depreciation and amortization; (iv) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency; (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment; (vi) noncash stock-based compensation expense, net; and (vii) certain acquisition, integration, restructuring, and related costs.
Contractual Obligations and Commitments Our principal commitments consist of standby letters of credits, long-term leases, and other purchase commitments entered into in the normal course of business.
Contractual Obligations and Commitments Our principal commitments consist of standby letters of credit, long-term leases, and other purchase commitments entered into in the normal course of business.
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 Consolidated Balance Sheets. The provision for transaction losses is included as a component of ‘Transaction expenses’ within the Consolidated Statements of Operations.
We establish 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 Consolidated Balance Sheets. The provision for transaction losses is included as a component of ‘Transaction expenses’ within the Consolidated Statements of Operations.
Marketing expenses also include personnel-related expenses associated with the Company’s marketing organization staff, including salaries, benefits and stock-based compensation expense, promotions, software subscription services dedicated for use by the Company’s marketing functions, and outside services contracted for marketing purposes.
Marketing expenses also include personnel-related expenses associated with marketing organization staff, including salaries, benefits, and stock-based compensation expense, promotions, costs for software subscription services dedicated for use by marketing functions, and outside services contracted for marketing purposes.
Revenue in the Notes to the Consolidated Financial Statements included in Part II Item 8 of this Annual Report on Form 10-K.
Leases in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Customer Support and Operations Customer support and operations expenses consist primarily of personnel-related expenses associated with the Company’s customer support and operations organization, including salaries, benefits, and stock-based compensation expense, as well as third-party costs for customer support services, and travel and related office expenses.
Customer Support and Operations Customer support and operations expenses consist primarily of personnel-related expenses associated with our customer support and operations organization, including salaries, benefits, and stock-based compensation expense, as well as third-party costs for customer support services, and travel and related office expenses.
Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of expansion into new corridors, and the timing of introductions of new products and enhancements of existing products.
Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of expansion into new corridors, and the timing of introductions of new products and enhancements of existing products, and other strategic investments.
This increase was primarily due to an increase in new customers, driven by investments in our mobile platform and efficient marketing spend, our focus on customer experience, expansion of our global disbursement network, and the continued diversification across both send and receive countries.
This increase was primarily due to an increase in the number of new customers, driven by investments in our mobile platform and efficient marketing spend, our focus on customer experience and how we serve our customers, expansion of our global disbursement network, and the continued diversification across both send and receive countries.
While shifts in our corridor mix could impact the trends in our global business, including send volume and customer economics, we have the ability to optimize these corridors over the long term based on their specific dynamics. Seasonality Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results.
While shifts in our corridor mix could impact the trends in our global business, including send volume and customer economics, we have the ability to optimize these corridors over the long term based on their specific dynamics. 44 Table of Content s Seasonality Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results.
Specifically, as a result of both growth and timing, we saw an increase in customer funds receivable of $126.9 million, which was the key driver for the unfavorable changes in our operating assets and liabilities of $95.5 million at the end of 2022.
Specifically, as a result of both growth and timing, we saw an increase in customer funds receivable of $126.9 million, which was the key driver for the unfavorable changes in our operating assets and liabilities of $99.0 million at the end of 2022.
As foreign currency can have a significant impact on our business, we strive to maintain a diversified cash balance portfolio and frequently assess for foreign currency cash concentrations.
As foreign currency can have a significant impact on our business, we strive to maintain a diversified cash balance portfolio and frequently assess for foreign currency cash concentrations. See Note 2.
Technology and development expenses also include professional services fees and costs for software subscription services dedicated for use by the Company’s technology and development teams, as well as other company wide technology tools.
Technology and development expenses also include professional services fees and costs for software subscription services dedicated for use by our technology and development teams, as well as other company-wide technology tools.
Accordingly, these are the policies we believe are the most important to aid in fully understanding and evaluating our reported financial results. Revenue Recognition Our primary source of revenue is generated from our remittance business.
Accordingly, these are the policies we believe are the most important to aid in fully understanding and evaluating our reported financial results. 54 Table of Content s Revenue Recognition Our primary source of revenue is generated from our remittance business.
Refer to “Contractual Obligations and Commitments” discussed further below. 53 Table of Contents In the future, we may also attempt to raise additional capital through the sale of equity securities or through equity-linked securities, and the ownership of our existing stockholders would be diluted.
Refer to “Contractual Obligations and Commitments” discussed further below. 52 Table of Content s In the future, we may also attempt to raise additional capital through the sale of equity securities or through equity-linked securities, and the ownership of our existing stockholders would be diluted.
Customer Acquisition Efficiently acquiring customers is critical to our growth and maintaining attractive customer economics, which is impacted by online marketing competition, our ability to effectively target the right demographic, and competitor pricing. We have a history of successfully monitoring customer acquisitions costs and will continue to be strategic and disciplined toward customer acquisition.
Customer Acquisition Efficiently acquiring customers is critical to our growth and maintaining of attractive customer economics, which are impacted by online marketing competition, our ability to effectively target the right demographic, and competitive environment. We have a history of successfully monitoring customer acquisition costs and will continue to be strategic and disciplined toward customer acquisition.
In addition, as discussed elsewhere in this Annual Report on Form 10-K, we expect that our operating expenses may continue to increase to support the continued growth of our business, including increased investments in our technology to support product improvements, new product development, and geographic expansion, as well as ongoing operating costs as a public company.
In addition, as discussed elsewhere in this Annual Report on Form 10-K, we expect that our operating expenses may continue to increase to support the continued growth of our business, including increased investments in our technology to support product improvements, new product development, and geographic expansion.
Send volume increased $8.2 billion, or 40%, to over $28.6 billion for the year ended December 31, 2022, compared to $20.4 billion for the year ended December 31, 2021, driven by the increase in active customers.
Send volume increased 40%, to $28.6 billion for the year ended December 31, 2022, compared to $20.4 billion for the year ended December 31, 2021, driven by the increase in active customers.
Attracting New Customers Our continued ability to attract new customers to our platform is a key driver for our long-term growth. We continue to expand our customer base by launching new send and receive corridors, by continuing to innovate on existing and new products, and by providing the most trusted financial services for immigrants.
Attracting New Customers Our continued ability to attract new customers to our platform is a key driver for our long-term growth. We continue to expand our customer base by launching new send and receive corridors, by continuing to innovate on existing and new products, and by providing the most trusted financial services for global citizens with cross-border financial needs.
Recently Issued Accounting Pronouncements See Note 2., Basis of Presentation and Summary of Significant Accounting Policies, in the Notes to the Company’s Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
Basis of Presentation and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
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.
Revenue is recognized when control of these services is transferred to our customers, which is the time the funds have been delivered to the intended recipient in an amount that reflects the consideration we expect to be entitled to in exchange for services provided.
Customer support and operations expenses also include professional services fees. 45 Table of Contents Marketing Marketing expenses consist primarily of advertising costs used to attract new customers, including branding-related expenses.
Customer support and operations expenses also include corporate communication costs and professional services fees. Marketing Marketing expenses consist primarily of advertising costs used to attract new customers, including branding-related expenses.
Stock-based compensation expense is generally recognized on a straight-line basis over the requisite service period, which is typically the vesting period of the respective award.
Stock-based compensation expense is generally recognized on a straight-line basis over the requisite service period, which is typically the vesting period of the respective award. Forfeitures are recognized in the period in which they occur.
Our 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 earned from transaction fees charged to customers and the foreign exchange spreads earned between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases.
Macroeconomic and Geopolitical Changes Global macroeconomic and geopolitical factors, including inflation, currency fluctuations, immigration, trade and regulatory policies, the conflict in Ukraine, unemployment, potential recession, and the rate of digital remittance adoption impact demand for our services and the options that we can offer.
Macroeconomic and Geopolitical Changes Global macroeconomic and geopolitical factors, including inflation, currency fluctuations, immigration, trade and regulatory policies, regional and global conflicts, global crises and natural disasters, unemployment, potential recession, and the rate of digital remittance adoption impact demand for our services, and the options that we can offer.
The preparation of these Consolidated Financial Statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, equity, revenue and expenses, and related disclosures. The Company’s estimates are based on historical experience and on various other factors that it believes are reasonable under the circumstances.
The preparation of these consolidated financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses, and related disclosures. Our estimates are based on historical experience and on various other factors that it believes are reasonable under the circumstances. Actual results may differ significantly from the estimates made by management.
As of December 31, 2022, we have unused borrowing capacity of $227.7 million. We believe that our cash, cash equivalents, and funds available under the New Revolving Credit Facility will be sufficient to meet our working capital requirements for at least the next twelve months.
As of December 31, 2023, we had unused borrowing capacity of $146.8 million. We believe that our cash, cash equivalents, and funds available under the 2021 Revolving Credit Facility will be sufficient to meet our working capital requirements for at least the next twelve months.
Actual results may differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
Approximately $12.0 million of these proceeds were held back at closing for any potential indemnity claims, which will be released after a 15-month holdback period, subject to any deductions, the majority of which will be settled in cash, subject to any deductions.
A portion of these proceeds were held back at closing for any potential indemnity claims, which will be released after a 15-month holdback period, subject to any deductions, the majority of which will be settled in cash, with a portion in Company common stock.
Our customers mostly send from the United States, Canada, and other countries in Europe. Our customers and their recipients are located in over 170 countries and territories across the globe; the largest receive countries by send volume include India, Mexico, and the Philippines.
Our customers and their recipients are located in over 170 countries and territories across the globe; the largest receive countries by send volume include India, Mexico, and the Philippines.
We base our estimate of expected volatility on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data. Risk-free interest rate. The risk-free interest rate used in the model is based on the implied yield currently available for the U.S. Treasury securities at maturity with an equivalent term.
We base our estimate of expected volatility on the historical volatility of our common stock as well as the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data. Risk-free interest rate. The risk-free interest rate used in the model is based on the implied yield currently available for the U.S.
Non-GAAP Financial Measures We regularly review the following non-GAAP measure to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that this non-GAAP measure provides meaningful supplemental information for management and investors in assessing our historical and future operating performance.
Key Business Metrics We regularly review the following key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance.
Cash provided by financing activities also historically consisted of proceeds from our IPO and concurrent private placement, as well as previous issuances of redeemable convertible preferred stock.
Cash provided by financing activities also historically consisted of proceeds from our IPO and concurrent private placement, previous issuances of redeemable convertible preferred stock, offset by the payment of debt issuances costs.
Other income, net Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent Other income, net $ 5,213 $ 3,125 $ 2,088 67 % Other income, net, increased $2.1 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to unrealized gains on foreign exchange remeasurements related to transactions associated with high-volume balance sheet amounts.
Other Income, Net Other income, net, increased $2.1 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to unrealized gains on foreign exchange remeasurements related to transactions associated with high-volume balance sheet amounts.
For example, for performance marketing, we set rigorous customer acquisition targets that we continuously monitor to ensure a high return on investment over the long term, and we can increase or decrease this investment as desired. Customer acquisition costs refer to direct marketing expenses deployed to acquire new customers and primarily includes digital advertising costs.
For example, for performance marketing, we set rigorous customer acquisition targets that we continuously monitor to ensure a high return on investment over the long term, and we can increase or decrease this investment as desired.
Over the long term we expect to continue to benefit from increasing scale, although we expect some variability in transaction expense from quarter to quarter. Reserve for Transaction Losses The Company is exposed to transaction losses, including chargebacks, unauthorized credit card use, fraud associated with customer transactions and other non-fraud-related losses.
Over the long term we expect to continue to benefit from increasing scale and improvements in our proprietary fraud models, although we expect some variability in transaction expense from quarter to quarter. 45 Table of Content s Provisions for Transaction Losses We are exposed to transaction losses, including chargebacks, unauthorized credit card use, fraud associated with customer transactions, and other non-fraud-related losses.
Liquidity and Capital Resources Sources of Liquidity and Material Future Cash Requirements As of December 31, 2022 and December 31, 2021, our principal sources of liquidity were cash and cash equivalents of $300.6 million and $403.3 million, respectively, as well as funds available under the New Revolving Credit Facility.
Liquidity and Capital Resources Sources of Liquidity and Material Future Cash Requirements As of December 31, 2023 and 2022, our principal sources of liquidity were cash and cash equivalents of $323.7 million and $300.6 million, respectively, as well as funds available under the 2021 Revolving Credit Facility, which we entered into in September 2021.
See Note 2 in the Notes to the Company’s Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a more comprehensive description of current business concentrations.
Basis of Presentation and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a more comprehensive description of current business concentrations.
Leases in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. 55 Table of Contents Critical Accounting Policies and Estimates The Company’s Consolidated Financial Statements and accompanying notes included in this Annual Report on Form 10-K are prepared in accordance with GAAP.
For further information on our lease arrangements refer to Note 20. Leases in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Critical Accounting Policies and Estimates Our consolidated financial statements and accompanying notes included in this Annual Report on Form 10-K are prepared in accordance with GAAP.
The main drivers for the unfavorable change in operating assets and liabilities were an increase in disbursement prefunding of $18.1 million, in line with the growth in our business and related to funding disbursement partners for expected send volume over a long holiday weekend, as well as an increase of $17.3 million in customer funds receivable, partially offset by an increase in accrued expenses and other liabilities of $26.1 million due to the timing of cash payments to vendors.
The main drivers for the unfavorable change in operating assets and liabilities were an increase in disbursement prefunding of $18.1 million, in line with the growth in our business and related to funding disbursement partners for expected send volume over a long holiday weekend, as well as an increase of $17.3 million in customer funds receivable, partially offset by an increase in accrued expenses and other liabilities of $26.1 million due to the timing of cash payments to vendors. 53 Table of Content s Investing Activities Cash used in investing activities consists primarily of purchases of property and equipment, capitalization of internal-use software, and cash paid for acquisitions of businesses, net of acquired cash, cash equivalents, and restricted cash.
For the year ended December 31, 2022, net cash used in operating activities was $105.1 million, which was primarily driven by the timing of funding customer transactions year over year, due to the current year ending on a Saturday during a holiday funding weekend, compared to the same date in prior year, which ended on a Friday.
For the year ended December 31, 2022, net cash used in operating activities was $108.7 million , which was primarily driven by the timing of funding customer transactions year over year including impact of weekend and holiday timing, compared to the prior year, which ended on a Friday.
Interest Income Interest income consists primarily of interest income earned on our cash and cash equivalents. Interest Expense Interest expense consists primarily of the interest expense on our borrowings. Other Income (Expense), net Other income (expense), net primarily consists of foreign exchange gains and losses.
Interest Income Interest income consists primarily of interest income earned on our cash and cash equivalents. Interest Expense Interest expense consists primarily of the interest expense on our borrowings.
Stock-Based Compensation in the Notes to the Company’s Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Common Stock within the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further detail on the donation of common stock.
Forfeitures are recognized in the period in which they occur. 56 Table of Contents For restricted stock units that are granted under our equity incentive plans, we estimate the fair value of the award based on the fair market value of the Company’s common stock on the date of grant.
For restricted stock units that are granted under our equity incentive plans, we estimate the fair value of the award based on the fair market value of our common stock on the date of grant.
They are an output of proprietary and dynamic models that are designed to provide fair and competitive rates to our customers, while generating a spread for the Company based on our ability to buy foreign currency at generally advantageous rates. Revenue from transaction fees and foreign exchange spreads is reduced by customer promotions.
Foreign exchange spreads represent the difference between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases. They are an output of proprietary and dynamic models that are designed to provide fair and competitive rates to our customers, while generating a spread based on our ability to buy foreign currency at generally advantageous rates.
As a percentage of revenue, marketing expenses remained flat at 26% for the year ended December 31, 2022 and 2021.
As a percentage of revenue, marketing expenses remained flat at 26% for the year ended December 31, 2022 and 2021. Technology and Development Expenses Technology and development expenses increased $74.6 million, or 116%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Federal interest rate. Interest Expense Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent Interest expense $ (1,302) $ (1,256) $ (46) 4 % Interest expense decreased by an immaterial amount for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
Federal interest rate. Interest Expense Interest expense decreased by an immaterial amount for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
The calculation of this non-GAAP measure discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors. We use Adjusted EBITDA, a non-GAAP financial measure to supplement net loss.
We believe that this non-GAAP measure provides meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of this non-GAAP measure discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors. We use Adjusted EBITDA, a non-GAAP financial measure to supplement net loss.
Commitments and Contingencies and Note 16. Leases in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
We also routinely enter into marketing and advertising contracts, as well as software and other service arrangements, that can include minimum purchase quantities, requiring us to utilize cash on hand to fulfill these amounts.
We also routinely enter into marketing and advertising contracts, software subscriptions and other service arrangements, including cloud infrastructure arrangements, which are generally entered into in the ordinary course of business, and that can include minimum purchase quantities, requiring us to utilize cash on hand to fulfill these amounts.
In addition, we routinely enter into marketing and advertising contracts, as well as software or other service arrangements, that contractually obligate us to purchase services in the near term, including minimum service quantities, unless we give notice of cancellation based on the applicable terms of the agreements. Most contracts are typically cancelable within a period of less than one year.
In addition, we routinely enter into marketing and advertising contracts, software subscriptions or other service arrangements, including cloud infrastructure arrangements, and compliance-application related arrangements that contractually obligate us to purchase services, including minimum service quantities, unless we give notice of cancellation based on the applicable terms of the agreements.
For example, a period of high growth in receive corridors with large average send amounts, such as India, could disproportionately impact send volume while impacting active customers to a lesser extent.
Corridor Mix Our business is global and certain attributes of our business vary by corridor, such as send amount, customer funding sources, and transaction frequency. For example, a period of high growth in receive corridors with large average send amounts, such as India, could disproportionately impact send volume while impacting active customers to a lesser extent.
As a percentage of revenue, general and administrative expenses increased to 20% for the year ended December 31, 2022, from 15% for the year ended December 31, 2021, due to an increase in headcount, stock-based compensation, and ongoing public company costs. 48 Table of Contents Depreciation and Amortization Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent Depreciation and Amortization $ 6,724 $ 5,256 $ 1,468 28 % Percentage of revenue 1 % 1 % Depreciation and amortization increased $1.5 million, or 28%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
As a percentage of revenue, general and administrative expenses increased to 20% for the year ended December 31, 2022, from 15% for the year ended December 31, 2021, due to an increase in headcount, stock-based compensation, and ongoing public company costs.
Common Stock Valuation Prior to the completion of our IPO, the fair values of the shares of common stock underlying our stock-based awards were determined by our board of directors, with input from management, considering numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved.
Our expected dividend yield is zero as we have never declared nor paid any dividends and do not currently expect to do so in the future. 55 Table of Content s Common Stock Valuation Prior to the completion of our IPO, the fair values of the shares of common stock underlying our stock-based awards were determined by our board of directors, with input from management, considering numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved.
Active Customers Active customers, measured as of the three months ended December 31, 2022, 2021, and 2020 were as follows: December 31, (in thousands) 2022 2021 2020 Active customers 4,188 2,836 1,891 We believe that the number of our active customers is an important indicator of customer engagement and the overall growth of our business.
Active Customers Active customers, measured as of the quarterly periods ended December 31, 2023, 2022, and 2021 were as follows: December 31, (in thousands) 2023 2022 2021 Active customers 5,911 4,188 2,836 We believe that the number of our active customers is an important indicator of customer engagement, customer retention, and the overall growth of our business. 43 Table of Content s Active customers increased to approximately 5.9 million, or 41% growth, for the three months ended December 31, 2023, compared to the three months ended December 31, 2022.
Technology and development expenses also include product and engineering teams used to support the development of both internal infrastructure and internal-use software, to the extent such costs do not qualify for capitalization. We believe delivering new functionality is critical to attract new customers and expand our relationship with existing customers.
Technology and development expenses also include product and engineering teams used to support the development of both internal infrastructure and internal-use software, to the extent such costs do not qualify for capitalization. Technology and development costs are generally expensed as incurred and do not include software development costs which qualify for capitalization as internal-use software.
As a percentage of revenue, customer support and operations expenses remained flat at 10% for the year ended December 31, 2022 as compared to the year ended December 31, 2021. 47 Table of Contents Marketing Expenses Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent Marketing $ 170,970 $ 120,906 $ 50,064 41 % Percentage of total revenue 26 % 26 % Marketing expenses increased $50.1 million, or 41%, for the year ended December 31, 2022, compared to the year ended December 31, 2021, due primarily to an increase of $34.2 million in direct marketing expense, including online and offline marketing spend and promotion costs to acquire new customers.
Marketing Expenses Marketing expenses increased $50.1 million, or 41%, for the year ended December 31, 2022, compared to the year ended December 31, 2021, due primarily to an increase of $34.2 million in advertising expense, including online and offline marketing spend and promotion costs to acquire new customers.
Customer Support and Operations Expenses Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent Customer support and operations $ 68,106 $ 45,525 $ 22,581 50 % Percentage of total revenue 10 % 10 % Customer support and operations expenses increased $22.6 million , or 50%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Customer Support and Operations Expenses Customer support and operations expenses increased $22.6 million, or 50%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Such 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.
General and administrative expenses also include professional services fees, software subscriptions, facilities, indirect taxes, and other corporate expenses, including acquisition and integration expenses. Such expenses primarily include external legal, accounting, valuation, and due diligence costs, advisory and other professional services fees necessary to integrate acquired businesses. See Note 6.
For example, we may, from time to time, waive transaction fees for first-time customers, or provide customers with better foreign exchange rates on their first transaction. These incentives are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero.
Revenue from transaction fees and foreign exchange spreads is reduced by customer promotions. For example, we may, from time to time, waive transaction fees for first-time customers, or provide customers with better foreign exchange rates on their first transaction.
We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of these key business metrics discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors.
The calculation of these key business metrics discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors.
General and Administrative Expenses Year Ended December 31, Change (dollars in thousands) 2022 2021 Amount Percent General and administrative $ 131,250 $ 70,941 $ 60,309 85 % Percentage of total revenue 20 % 15 % General and administrative expenses increased $60.3 million, or 85%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.
General and Administrative Expenses General and administrative expenses increased $60.3 million, or 85%, for the year ended December 31, 2022, compared to the year ended December 31, 2021.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022 and December 31, 2021, a hypothetical uniform 10% strengthening or weakening in the value of the U.S. dollar relative to other currencies in which our net loss is generated, would have resulted in a decrease or increase to the fair value of our customer transaction related assets and liabilities denominated in currencies other than the subsidiaries’ functional currencies of approximately $10.2 million and $11.6 million, respectively, based on our unhedged exposure to foreign currency at that date.
Biggest changeAs of December 31, 2023 and 2022, a hypothetical uniform 10% strengthening or weakening in the value of the U.S. dollar relative to other currencies in which our net loss was generated, would have resulted in a decrease or increase to the fair value of our customer transaction-related assets and liabilities denominated in currencies other than the subsidiaries’ functional currencies of approximately $19.3 million and $10.2 million, respectively, based on our unhedged exposure to foreign currency at that date.
We mitigate this credit risk by engaging with reputable pay-in payment providers and entering into written agreements with pay-in providers allowing for legal recourse.
We mitigate this credit risk by engaging with reputable pay-in payment providers and entering into written agreements with pay-in payment providers allowing for legal recourse.
As such, the Consolidated Financial Statements will continue to remain subject to the impact of foreign currency translation, as our international business continues to grow. In periods where other currencies weaken against the U.S. dollar, this can negatively impact our consolidated results which are reported in the U.S. dollar.
As such, the consolidated financial statements will continue to remain subject to the impact of foreign currency translation, as our international business continues to grow. In periods where other currencies weaken against the U.S. dollar, this can negatively impact our consolidated results which are reported in U.S. dollars.
Changes in the relative value of the U.S. dollar to other currencies may affect revenue and other operating results as expressed in U.S. dollars. In addition, our international subsidiary financial statements are denominated in and operated in currencies outside of the U.S. dollar.
Changes in the relative value of the U.S. dollar to other currencies may affect revenue and other operating results as expressed in U.S. dollars. In addition, certain of our international subsidiary financial statements are denominated in and operated in currencies outside of the U.S. dollar.
Credit Risk We have a limited number of pay-in payment processors and therefore we are exposed to credit risk relating to those pay-in payment providers if in the course of a transaction, we were to disburse funds to the recipient but the pay-in payment provider does not deliver our customer’s funds to us (for example, due to their illiquidity).
Credit Risk We have a limited number of pay-in payment processors and therefore we are exposed to credit risk relating to those pay-in payment providers if, in the course of a transaction, we were to disburse funds to the recipient but the pay-in payment provider did not deliver our customer’s funds to us (for example, due to their illiquidity).
We have not experienced significant losses during the periods presented. 57 Table of Contents Foreign Currency Exchange Rate Risk Given the nature of our business, we are exposed to foreign exchange rate risk in a number of ways.
We have not experienced significant losses during the periods presented. 56 Table of Content s Foreign Currency Exchange Rate Risk Given the nature of our business, we are exposed to foreign exchange rate risk in a number of ways.
We may do so in the future, but it is difficult to predict the impact hedging activities would have on our operating results. 58 Table of Contents
We may do so in the future, but it is difficult to predict the impact hedging activities would have on our operating results. 57 Table of Content s

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