Remitly (RELY) Q2 2025: Remitly Business Drives 10x TAM Expansion, Anchoring Platform Shift

2025-08-06 | By EarningsIQ Research

Remitly’s second quarter marked a pivotal transition as the company scaled its addressable market tenfold with the launch of Remitly Business and prepared to debut Remitly One, a membership ecosystem unifying cross-border financial tools. Strategic investments in AI, stablecoins, and product innovation are fueling both operational leverage and customer engagement, while management’s guidance signals confidence in durable, diversified growth through year-end. With new products and geographies coming online, Remitly’s platform ambitions are redefining its competitive positioning in global fintech.

Summary

• Business Product Unlocks New Market: Remitly Business expands reach to small enterprises and freelancers, multiplying TAM and improving retention.
• Membership Ecosystem Launches: Remitly One’s September rollout integrates wallet, flexible funding, and stablecoin features for daily engagement.
• AI and Stablecoin Initiatives Accelerate: Embedded AI and blockchain rails drive operational efficiency, digital adoption, and future-proof the platform.

Performance Analysis

Remitly delivered strong top-line growth and margin expansion, with revenue up 34% year-over-year and adjusted EBITDA margin reaching 16%. Send volume increased 40% to $18.5 billion, driven by both higher transaction frequency and a 12% rise in send volume per active customer. The active customer base grew to over 8.5 million, reflecting effective retention and new customer acquisition.

Geographic and customer diversification were evident: US revenue rose 35%, while international markets grew 40%, and regions outside India, Mexico, and the Philippines outpaced overall company growth. High-amount senders (over $1,000 per transaction) saw 45% volume growth, now representing a growing share of total volume, supported by AI-driven compliance and new product features.

• Transaction Expense Leverage: Non-loss transaction expenses improved 175 basis points year-over-year as a percentage of revenue, aided by a digital mix shift and scale.
• Fraud Incident Contained: A one-time $3.8 million fraud event modestly raised loss provisions, but was swiftly addressed with enhanced AI risk controls.
• Marketing Efficiency Gains: Marketing spend per active customer fell 11% YoY, with brand partnerships and digital campaigns driving awareness and cost discipline.

Operating leverage was further supported by technology and customer support efficiencies, as 97% of transactions required no agent intervention and platform uptime remained near-perfect. These trends underpin Remitly’s ability to invest in new products while maintaining profitability.

Executive Commentary

Strategic Positioning

1. Remitly Business: B2B Expansion and TAM Multiplier

Remitly Business, launched in Q2, extends the company’s platform to small businesses and freelancers, expanding its total addressable market (TAM) from $2 trillion to $22 trillion. Early results show transaction sizes nearly double the consumer average and sixfold higher customer lifetime value, with strong retention signals. The product leverages Remitly’s core digital money movement infrastructure, offering features like fast onboarding, automated eKYB (electronic Know Your Business), bulk payouts, and real-time fraud detection. Upcoming launches in the UK, Canada, Australia, and the EU are set to further broaden reach.

2. Remitly One: Membership Ecosystem for Cross-Border Needs

Remitly One, debuting in September, positions the company as a holistic financial partner for global citizens. The membership integrates Remitly Wallet—a multi-currency, fiat and stablecoin-enabled store of value—and Remitly Flex, a send-now-pay-later liquidity tool. The program aims to drive daily engagement, loyalty, and upsell opportunities, offering rewards, flexible repayment, and seamless integration across the Remitly app. Early feedback signals strong demand for both wallet and Flex features.

3. Stablecoin and Blockchain Integration

Remitly’s stablecoin strategy addresses both customer demand and internal efficiency. Three initiatives are underway: (1) customers can store and manage stablecoins in their wallet, (2) cross-border payouts to stablecoin-compatible wallets are being piloted (with Bridge, a Stripe company), and (3) internal treasury operations now use tokenized dollar stablecoins for instant settlement and reduced costs. These moves position Remitly to benefit from future digital asset adoption, especially in inflation-prone markets.

4. Agentic AI: Operational and Customer Acquisition Engine

Agentic AI, Remitly’s proprietary conversational AI platform, now handles nearly 2 million real-time interactions per quarter, reducing support costs and increasing satisfaction. The integration with WhatsApp has proven particularly effective at converting previously offline users, supporting the regulatory-driven shift from cash to digital channels. AI is also embedded in onboarding, compliance, and marketing, enhancing both efficiency and top-line growth.

5. Capital Flexibility and Shareholder Returns

Remitly closed a $550 million revolving credit facility (up from $325 million) to fund growing transaction volumes and authorized a $200 million share repurchase program. These actions reflect a balanced approach to growth investment and capital returns, supported by consistent GAAP profitability and strong free cash flow.

Key Considerations

Remitly’s Q2 marks a strategic inflection, with new product launches and operational discipline positioning the company for durable, multi-segment growth. The following considerations frame the evolving landscape:

Key Considerations:

• B2B and High-Amount Sender Focus: Remitly Business and targeted features for high-amount senders are raising transaction sizes, retention, and revenue per user.
• Membership Platform Upsell: Remitly One’s integration of wallet and Flex features is designed to deepen engagement and cross-sell, with initial uptake expected from the existing customer base.
• AI and Automation Drive Margin: Conversational AI reduces support costs and enables acquisition from offline channels, while also improving compliance and risk management.
• Stablecoin Readiness: Early-stage stablecoin features are strategically aligned with emerging market needs and regulatory trends, though near-term adoption is modest.
• Capital Allocation Discipline: Increased credit facility and share buyback reflect confidence in underlying cash generation and a focus on shareholder value.

Risks

Remitly faces execution risk as it expands into new customer segments and geographies, with increased investment in marketing, technology, and compliance required to support product rollouts. Regulatory shifts, especially around digital assets and cross-border taxes, could alter economics or require rapid adaptation. Fraud remains an ongoing risk, as highlighted by the Q2 incident, though management responded decisively and reinforced controls. Finally, competitive intensity in both consumer and business remittances may pressure take rates as the platform scales.

Forward Outlook

For Q3 2025, Remitly guided to:

• Revenue of $411 to $413 million (22% to 23% growth)
• Adjusted EBITDA of $53 to $55 million (13% margin)

For full-year 2025, management raised guidance to:

• Revenue of $1.61 to $1.62 billion (27% to 28% growth)
• Adjusted EBITDA of $225 to $230 million (14% margin)

Management cited visibility from prior year cohorts, continued strength in high-amount senders and business users, and the expectation that send volume growth will outpace revenue growth as transaction sizes rise. Marketing investment will increase to support new product launches, but efficiency remains a priority.

• Product launches in Remitly One and stablecoin features are incorporated into guidance
• Volume growth is expected to be a stronger indicator of future potential than active customer growth alone

Takeaways

Remitly’s Q2 results underscore a platform transition, with new business lines, AI-driven operations, and capital flexibility setting the stage for sustained, diversified growth.

• Product Innovation Drives TAM and Retention: Remitly Business and Remitly One unlock new segments and deepen engagement, with early retention and unit economics metrics exceeding consumer benchmarks.
• Operational Leverage Supports Investment: AI and automation are delivering both cost savings and new customer acquisition, enabling reinvestment in marketing and technology without sacrificing profitability.
• Future Watchpoint—Adoption Curve for New Features: The pace of uptake for Remitly One, wallet, and stablecoin features will be critical for revenue mix and margin trajectory in coming quarters.

Conclusion

Remitly’s second quarter reflects a strategic pivot from single-product remittance to a multi-segment, platform-driven fintech model. With new products, disciplined execution, and a focus on both consumer and business users, the company is positioned for long-term growth. Execution on product adoption and regulatory agility will determine the durability of this transformation.

Industry Read-Through

Remitly’s expansion into B2B payments, stablecoin rails, and membership-based financial services signals a broader industry shift as fintechs seek to capture greater wallet share and unlock new monetization levers beyond traditional remittance. The regulatory-driven move from cash to digital, amplified by AI and conversational interfaces, is likely to accelerate offline-to-online migration industry-wide. Competitors in cross-border payments, digital wallets, and neobanking should note the operational and product innovation pace, as well as Remitly’s early moves to integrate blockchain and stablecoin infrastructure for both customer-facing and treasury functions. The bar for user experience, compliance, and platform breadth is rising across global fintech.

RELY Financials Fintech Membership Stablecoin AI B2B Digital Payments