Remitly Global Inc

Previous wording

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

Current wording

To deliver on our brand promise, we have a differentiated approach that aligns with the specific needs and interests of our customers who are sending money across borders and solves the problems they often face. There are four core elements to our differentiated approach:

Previous wording

•Mobile First. Our mobile app for cross-border remittances provides an easy-to-use, end-to-end process with a simple and reliable user experience that delivers peace of mind. 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. Our customers and their families can also track the status of their transactions as they are processed, and we provide a reliability promise to customers which is underpinned by our sophisticated risk models, high quality network, and empathetic customer service. This mobile-first experience enables us to engage beyond the initial transaction, generating strong repeat usage and high customer loyalty. Our services are highly non-discretionary for our customers which results in high revenue visibility throughout economic cycles.

Current wording

•Mobile First. Our mobile app for cross-border remittances provides an easy-to-use, end-to-end process with a simple and reliable user experience that delivers peace of mind. 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. Our customers and their recipients can also track the status of their transactions as they are processed, and we provide a reliability promise to customers which is underpinned by our sophisticated risk models, high quality network, and empathetic customer service. This mobile-first experience enables us to engage beyond the initial transaction, generating strong repeat usage and high customer loyalty. Our services are highly non-discretionary for our customers which results in high revenue visibility throughout economic cycles.

Previous wording

•Global Scale and High Quality Money Movement Platform. Our global network of funding and disbursement partnerships enables us to complete money transfers efficiently in approximately 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. A corridor represents the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent. As a result of the quality of our network and the foundational investments we have made, in general every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly. Our scale and direct integration strategy allows us to negotiate favorable terms with both funding and disbursement partners while providing a great end-to-end customer experience including rapid and reliable transfers.

Current wording

•Global Scale and High Quality Money Movement Platform. 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. A corridor represents the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent. As a result of the quality of our network and the foundational investments we have made, in general every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly. Our scale and direct integration strategy allows us to negotiate favorable terms with both funding and disbursement partners while providing a great end-to-end customer experience including rapid and reliable transfers.

Previous wording

Our disbursement network enables us to send (or pay-out) funds to over 4.2 billion bank accounts, over 1.2 billion mobile wallets, and approximately 470,000 cash pick-up options including various currencies provided. We focus on creating financial inclusion by providing payout optionality and access for recipients who do not always have convenient access to traditional banking. We believe our focus on financial inclusion creates peace of mind for our customers and their families while attracting and retaining loyal customers.

Current wording

Our disbursement network enables us to send (or pay-out) funds to over 5.0 billion bank accounts and mobile wallets and approximately 470,000 cash pick-up options including various currencies provided. We focus on creating financial inclusion by providing payout optionality and access for recipients who do not always have convenient access to traditional banking. We believe our focus on financial inclusion creates peace of mind for our customers and their families while attracting and retaining loyal customers.

Previous wording

•Highly Attractive Unit Economics. Our data driven approach to optimizing customer lifetime value combined with a localized and scalable marketing platform allows us to acquire new customers at highly attractive unit economics. As we continue to improve customer lifetime value through product enhancements and changes to variable operating costs, we are able to invest more in marketing while maintaining our marketing efficiency. 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.

Current wording

•Highly Attractive Unit Economics. Our data driven approach to optimizing customer lifetime value combined with a localized and scalable marketing platform allows us to acquire new customers at highly attractive unit economics. As we continue to improve customer lifetime value through product enhancements and changes to variable operating costs, we can optimize marketing spend to drive both growth and efficiency with a focus on maintaining strong unit economics. 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.

Previous wording

•Superior Technology Platform. We believe that our differentiated approach to building our technology infrastructure enables a great customer experience and allows us to scale to meet customer demands in a more flexible way. We have been able to scale to more customers, more regions, and more use cases while continuing to get better at our reliability, speed, and performance due to our investments and unique approach to our technology platform. This enables not only our ability to scale, but also accelerates innovation on behalf of our customers - whether that is doing simple things well like delivering reliability, speed, and performance, or about enabling new use cases like complementary new products over time. 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. In addition, we leverage our data platform and proprietary models to improve our compliance systems and manage pricing, treasury, fraud risk, and customer support. Finally, our proactive investments in artificial intelligence and machine learning have continued to drive scaled improvement in the areas of fraud and risk, pricing, customer support, and marketing.

Current wording

•Superior Technology Platform. We believe that our differentiated approach to building our technology infrastructure enables a great customer experience and allows us to scale to meet customer demands in a more flexible way. We have been able to scale to more customers, more regions, and more use cases while continuing to get better at our reliability, speed, and performance due to our investments and unique approach to our technology platform. This enables not only our ability to scale, but also accelerates innovation on behalf of our customers - whether that is doing simple things well or about enabling new use cases like complementary new products over time. 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. In addition, we leverage our data platform and proprietary models to improve our compliance systems and manage pricing, treasury, fraud risk, and customer support. Finally, our proactive investments in artificial intelligence and machine learning have continued to drive scaled improvement in the areas of fraud and risk, pricing, customer support, and marketing.

Previous wording

Active customers increased to approximately 6.2 million, or 36% growth, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. 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 we continue to see strong results in our largest existing receive countries, our successful diversification of our corridor portfolio across both send and receive countries has contributed to new customer growth.

Current wording

Active customers increased to approximately 6.9 million, or 36% growth, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. 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 we continue to see strong results in our largest existing receive countries (India, Mexico, and the Philippines), our successful diversification of our corridor portfolio across both send and receive countries has contributed to new customer growth.

Previous wording

Send volume increased 34% to $11.5 billion for the three months ended March 31, 2024, compared to $8.5 billion for the three months ended March 31, 2023, driven by the increase in active customers.

Current wording

Send volume increased 38% to $13.2 billion for the three months ended June 30, 2024, compared to $9.6 billion for the three months ended June 30, 2023, driven by the increase in active customers.

Previous wording

Our send volume is primarily driven by existing customers who regularly use our remittance product to send money home. We believe our mobile-first products and superior customer experience encourage high retention and repeat usage, which are significant though not the only drivers of our performance.

Current wording

Our send volume is primarily driven by existing customers who regularly use our remittance product to send money to family and friends. We believe our mobile-first products and superior customer experience encourage high retention and repeat usage, which are significant though not the only drivers of our performance.

Previous wording

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.

Current wording

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 predictability and durability.

Previous wording

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

Current wording

Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results. For example, active customers and send volume generally peak as customers send gifts for regional and global holidays including, most notably, in the fourth quarter around the Christmas holiday. This seasonality typically drives higher fourth quarter customer acquisition, which generally results in higher fourth quarter marketing costs and transaction losses. It also results in higher transactions and transaction expenses, along with higher working capital needs. Other periods of favorable seasonality include Ramadan/Eid, Lunar New Year/Tết, and Mother’s Day, although the impact is generally lower than the seasonality we see in the fourth quarter and the timing of some of these holidays varies from year to year. Conversely, we typically observe lower customer acquisition and existing customer activity through most of the first quarter, especially in regions that experience favorable seasonality in the fourth quarter. Following the fourth quarter, typically the second quarter is seasonally the next strongest quarter from an existing customer activity perspective, however customer activity and the impact on financial results can vary across quarters based on the timing of holidays and other geographic drivers. Additionally, the number of business days in a quarter and the day of the 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.

Previous wording

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. 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. For example, as the U.S. dollar strengthens, we see customers in certain markets taking advantage of the ability to get more local currency to their families and friends. We also believe the strength of the U.S. dollar and the strength of other developed market currencies versus emerging market currencies make it easier to acquire new customers in certain markets. Conversely, expansion of our international business can negatively impact our condensed consolidated results when these currencies weaken against the U.S. dollar. As we grow, we are becoming more diversified across geographies and currencies, which can help mitigate some localized geopolitical risks and macroeconomic trends. As foreign currency can have a significant impact on our business, we strive to maintain a diversified cash balance portfolio and frequently assess for foreign currency cash concentrations. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies in the Company’s notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a more comprehensive description of current business concentrations.

Current wording

Global macroeconomic and geopolitical factors, including inflation, currency fluctuations, immigration, regulatory changes, 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. 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. For example, as the U.S. dollar strengthens, we see customers in certain markets taking advantage of the ability to get more local currency to their families and friends. We also believe the strength of the U.S. dollar and the strength of other developed market currencies versus emerging market currencies make it easier to acquire new customers in certain markets. Conversely, expansion of our international business can negatively impact our condensed consolidated results when these currencies weaken against the U.S. dollar. As we grow, we are becoming more diversified across geographies and currencies, which can help mitigate some localized geopolitical risks and macroeconomic trends. As foreign currency can have a significant impact on our business, we strive to maintain a diversified cash balance portfolio and frequently assess for foreign currency cash concentrations. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies in the Company’s notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a more comprehensive description of current business concentrations.

Previous wording

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. 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.

Current wording

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. Revenue is recognized, in an amount that reflects the consideration we expect to be entitled to in exchange for services provided, when control of these services is transferred to our customers, which is the time the funds have been delivered to the intended recipient.

Previous wording

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

Current wording

Transaction expenses include fees paid to disbursement partners for paying funds to the recipient, provisions for transaction losses, and fees paid to payment processors for funding transactions. Transaction expenses also include credit losses, chargebacks, fraud prevention, fraud management tools, and compliance tools. We establish reserves for transaction losses based on historical trends and any specific risks identified in processing customer transactions. This reserve is included in ‘Accrued expenses and other current liabilities’on the Condensed Consolidated Balance Sheets included in Part I, Item 1 of this Quarterly Report on Form 10-Q. 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.

Previous wording

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. 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. 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. The amortization of internal-use software costs which were capitalized in accordance with ASC 350-40, Intangibles - Goodwill and Other-Internal-Use Software, are separately presented under the caption ‘Depreciation and amortization’ within the Condensed Consolidated Statements of Operations.

Current wording

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. 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. 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. The amortization of internal-use software costs which were capitalized in accordance with ASC 350-40, Intangibles - Goodwill and Other-Internal-Use Software, are separately presented under the caption ‘Depreciation and amortization’ within the Condensed Consolidated Statements of Operations included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Comparison of the three months ended March 31, 2024 and 2023

Current wording

Comparison of the three and six months ended June 30, 2024 and 2023

Previous wording

The following table sets forth our results of operations together with the dollar and percentage change for the three months ended March 31, 2024 and 2023, as well as the components of our condensed consolidated statements of operations for the periods presented as a percentage of revenue:

Current wording

The following tables set forth our results of operations together with the dollar and percentage change for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following discussion and analysis is for the three months ended March 31, 2024, compared to the same period in 2023, unless otherwise stated.

Current wording

The following discussion and analysis is for the three and six months ended June 30, 2024, compared to the same period in 2023, unless otherwise stated.

Previous wording

Revenue increased $65.3 million, or 32%, to $269.1 million for the three months ended March 31, 2024, compared to $203.9 million for the three months ended March 31, 2023. This increase was primarily driven by a 36% increase in active customers period over period, continued strength in the retention of existing customers, and a continued mix shift trending towards digital disbursements. Revenue derived from each transaction varies based on a number of attributes, including the funding method chosen by the customer, the size of the transaction, the currency to be ultimately disbursed, the rate at which the currency was disbursed, the disbursement method chosen by the customer, and the countries to which the funds are transferred.

Current wording

Revenue increased 31%, or $72.4 million and $137.6 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023. This increase was primarily driven by a 36% increase in active customers period over period, continued strength in the retention of existing customers, and a continued mix shift trending towards digital disbursements. Revenue derived from each transaction varies based on a number of attributes, including the funding method chosen by the customer, the size of the transaction, the currency to be ultimately disbursed, the rate at which the currency was disbursed, the disbursement method chosen by the customer, and the country to which the funds are transferred.

Previous wording

As a reflection of this growth, send volume increased 34% to $11.5 billion for the three months ended March 31, 2024, as compared to $8.5 billion for the three months ended March 31, 2023.

Current wording

As a reflection of this growth, send volume increased 38% and 36% to $13.2 billion and $24.7 billion for the three and six months ended June 30, 2024, respectively, as compared to $9.6 billion and $18.1 billion for the three and six months ended June 30, 2023, respectively.

Previous wording

Transaction expenses increased $15.8 million, or 21%, to $89.9 million for the three months ended March 31, 2024, compared to $74.1 million, for the three months ended March 31, 2023. The increase was primarily due to a $14.1 million increase in direct costs associated with processing a higher volume of our customers’ remittance transactions and the disbursement of our customers’ funds to their recipients.

Current wording

Transaction expenses increased $27.6 million, or 34%, to $107.8 million for the three months ended June 30, 2024, compared to $80.2 million for the three months ended June 30, 2023. The increase was primarily due to a $19.6 million, or 30%, increase in direct costs associated with processing a higher volume of our customers’ remittance transactions and the disbursement of our customers’ funds to their recipients and a $7.5 million increase in our provision for fraud and other losses.

Previous wording

Customer support and operations expenses increased $0.2 million, or 1%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily driven by a $0.8 million increase to restructuring costs primarily related to severance (refer to Note 13. Restructuring Initiatives in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the restructuring costs). This was offset by a $0.6 million decrease in personnel-related costs driven by an 11% decrease in customer support and operations headcount compared to the three months ended March 31, 2023.

Current wording

Customer support and operations expenses decreased $1.3 million, or 3%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The decrease was primarily driven by a $1.8 million decrease in personnel-related costs driven by a decrease in customer support and operations headcount compared to the six months ended June 30, 2023. This was partially offset by a $0.8 million increase to restructuring costs primarily related to severance (refer to Note 13. Restructuring Initiatives in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the restructuring costs).

Previous wording

As a percentage of revenue, customer support and operations expenses decreased to 7% for the three months ended March 31, 2024, from 10% for the three months ended March 31, 2023. The decrease was primarily due to process improvements and automation driving scale across customer support headcount at internal and third-party customer support sites.

Current wording

As a percentage of revenue, customer support and operations expenses decreased to 7% for both the three and six months ended June 30, 2024, from 9% for both the three and six months ended June 30, 2023. The decrease was primarily due to process improvements and automation driving scale across customer support headcount at internal and third-party customer support sites.

Previous wording

Marketing expenses increased $23.9 million, or 54%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to an increase of $19.8 million in advertising expense and other targeted marketing expense, including online and offline marketing spend and promotion costs to acquire new customers. In addition, personnel-related costs increased by $3.5 million, driven by a 23% increase in marketing headcount compared to the three months ended March 31, 2023.

Current wording

Marketing expenses increased $23.5 million, or 44%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to an increase of $20.9 million in advertising expense and other targeted marketing expense, including online and offline marketing spend and promotion costs to acquire new customers. In addition, personnel-related costs increased by $1.7 million, driven by a 13% increase in marketing headcount compared to the three months ended June 30, 2023.

Previous wording

Technology and development expenses increased $13.8 million, or 28% for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was driven by $11.8 million in personnel-related expenses, net of personnel-related expenses capitalized as internal-use software, resulting from a 23% increase in headcount compared to the three months ended March 31, 2023, as part of our continued investment in our technology platform. The increase in technology and development expense was also driven by a $2.1 million increase in software costs for cloud services to support incremental transaction volume.

Current wording

Technology and development expenses increased $13.2 million, or 24%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was driven by $10.5 million in personnel-related expenses, net of personnel-related expenses capitalized as internal-use software, resulting from a 16% increase in headcount compared to the three months ended June 30, 2023, as part of our continued investment in our technology platform. The increase in technology and development expense was also driven by a $2.0 million increase in software costs for cloud services to support incremental transaction volume.

Previous wording

General and administrative expenses increased $2.8 million, or 7%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase was primarily driven by a $5.6 million increase in personnel-related expenses resulting from an 18% increase in headcount compared to the three months ended March 31, 2023. This increase in general and administrative expenses was partially offset by a reduction in indirect taxes, professional fees, and certain non-recurring tax benefits recognized in the current quarter.

Current wording

General and administrative expenses increased $9.2 million, or 11%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily driven by a $11.5 million increase in personnel-related expenses resulting from a 12% increase in headcount compared to the six months ended June 30, 2023. The increase in general and administrative expenses was partially offset by a reduction in indirect taxes and other operating expenses.

Previous wording

As a percentage of revenue, general and administrative expenses decreased to 16% for the three months ended March 31, 2024, from 20% for the three months ended March 31, 2023, as we begin to leverage scale in our general and administrative functions.

Current wording

As a percentage of revenue, general and administrative expenses decreased to 15% and 16% for the three and six months ended June 30, 2024, respectively, from 17% and 18% for the three and six months ended June 30, 2023, respectively, as we begin to leverage scale in our general and administrative functions.

Previous wording

Depreciation and amortization increased $0.6 million, or 21%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase is primarily driven by an increase in amortization of internal-use software.

Current wording

Depreciation and amortization increased $0.7 million and $1.4 million, or 23% and 22%, respectively, for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023. The increase is primarily driven by an increase in amortization of internal-use software.

Previous wording

The provision for income taxes increased by $0.6 million for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This increase is primarily driven by an increase in taxable income in certain foreign jurisdictions.

Current wording

The provision for income taxes increased $3.4 million and $4.1 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increase is primarily due to increases in taxable income in certain foreign jurisdictions and decreases in discrete income tax benefits related to excess stock-based compensation deductions.

Previous wording

We use Adjusted EBITDA, a non-GAAP financial measure to supplement net loss. 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 other costs.

Current wording

We use Adjusted EBITDA, a non-GAAP financial measure to supplement net loss. Adjusted EBITDA is calculated as net loss adjusted by (i) interest (income) expense, net; (ii) provision for income taxes; (iii) noncash charges 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 other costs.

Previous wording

•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;

Current wording

•Adjusted EBITDA excludes stock-based compensation expense, net, 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;

Previous wording

(1)Acquisition, integration, restructuring, and other costs for the three months ended March 31, 2024 consisted primarily of $0.8 million in restructuring charges incurred, $0.5 million of non-recurring legal charges, and $0.2 million related to the change in the fair value of the holdback liability associated with the acquisition of Rewire (O.S.G.) Research and Development Ltd. ("Rewire"). Acquisition, integration, restructuring, and other costs for the three months ended March 31, 2023 consisted primarily of $0.8 million related to the change in the fair value of the holdback liability and $0.4 million of professional fees incurred in connection with the acquisition and integration of Rewire. Refer to Note 6. Business Combinations and Note 13. Restructuring Initiatives in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on these costs.

Current wording

(1)Acquisition, integration, restructuring, and other costs for the six months ended June 30, 2024 consisted primarily of $0.8 million in restructuring charges incurred, $0.5 million of non-recurring legal charges, and $0.2 million related to the change in the fair value of the holdback liability associated with the acquisition of Rewire (O.S.G.) Research and Development Ltd. ("Rewire"). Acquisition, integration, restructuring, and other costs for the three months ended June 30, 2023 consisted primarily of $0.2 million related to the change in the fair value of the holdback liability. Acquisition, integration, restructuring, and other costs for the six months ended June 30, 2023 consisted primarily of $1.0 million related to the change in the fair value of the holdback liability and $0.5 million of expenses incurred in connection with the acquisition and integration of Rewire. Refer to Note 6. Business Combinations and Note 13. Restructuring Initiatives in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on these costs.

Previous wording

As of March 31, 2024 and December 31, 2023, our principal sources of liquidity were cash and cash equivalents of $286.0 million and $323.7 million, respectively, as well as funds available under the 2021 Revolving Credit Facility, which we entered into in September 2021. The 2021 Revolving Credit Facility was amended on December 20, 2023 to increase the revolving commitments from$250.0 million (including a$60.0 million letter of credit sub-facility) to$325.0 million. We have historically financed our operations and capital expenditures primarily through cash generated from operations including transaction fees and foreign exchange spreads. In recent periods, we have supplemented those cash flows with borrowings on our 2021 Revolving Credit Facility, primarily to support customer transaction volumes during peak periods, which we expect to continue to do in the future. During the three months ended March 31, 2024, we cumulatively borrowed $275.0 million against this credit facility, of which we repaid $255.0 million. The outstanding balance of $150.0 million as of March 31, 2024 was subsequently repaid the following business day on April 1, 2024. Operations continue to be substantially funded by the existing cash we have on hand and ongoing utilization of the 2021 Revolving Credit Facility (including the letter of credit sub-facility), which included active borrowings and repayments during the three months ended March 31, 2024. As of March 31, 2024, we have unused borrowing capacity of $126.9 million.

Current wording

As of June 30, 2024 and December 31, 2023, our principal sources of liquidity were cash and cash equivalents of $185.2 million and $323.7 million, respectively, as well as funds available under the 2021 Revolving Credit Facility, which we entered into in September 2021. The 2021 Revolving Credit Facility was amended on December 20, 2023 to increase the revolving commitments from$250.0 million (including a$60.0 million letter of credit sub-facility) to$325.0 million. We have historically financed our operations and capital expenditures primarily through cash generated from operations including transaction fees and foreign exchange spreads. In recent periods, we have supplemented those cash flows with borrowings on our 2021 Revolving Credit Facility, primarily to support customer transaction volumes during peak periods and weekends, which we expect to continue to do in the future. During the six months ended June 30, 2024, we cumulatively borrowed $570.0 million against this credit facility and repaid $685.0 million. The outstanding balance of $15.0 million as of June 30, 2024 was subsequently repaid the following business day on July 1, 2024. Operations continue to be substantially funded by the existing cash we have on hand and ongoing utilization of the 2021 Revolving Credit Facility (including the letter of credit sub-facility), which included active borrowings and repayments during the six months ended June 30, 2024. As of June 30, 2024, we have unused borrowing capacity of $262.1 million.

Previous wording

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. Our material cash requirements include funds to support current and potential operating activities, capital expenditures, and other commitments, and could include other uses of cash, such as strategic investments. 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. A portion of these proceeds were held back at closing for any potential indemnity claims during the 15-month holdback period, subject to any deductions, the majority of which will be settled in cash, with a portion in Company common stock. As of March 31, 2024, the fair value of the liability held back that will be settled in cash and Company common stock was $13.2 million and was settled in April 2024. Refer to Note 6. Business Combinations in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the settlement of the holdback liability.

Current wording

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. Our material cash requirements include funds to support current and potential operating activities, capital expenditures, and other commitments, and could include other uses of cash, such as strategic investments.

Previous wording

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. Furthermore, certain jurisdictions where we operate require us to hold eligible liquid assets, based on regulatory or legal requirements, equal to the aggregate amount of all customer balances. In addition, as discussed elsewhere in this Quarterly Report on Form 10-Q, 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. 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. Refer to “Contractual Obligations and Commitments” discussed further below.

Current wording

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. Furthermore, certain jurisdictions where we operate require us to hold eligible liquid assets, based on regulatory or legal requirements, equal to the aggregate amount of all customer balances that have not yet been disbursed. In addition, as discussed elsewhere in this Quarterly Report on Form 10-Q, 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. 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. Refer to “Contractual Obligations and Commitments” discussed further below.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $56.8 million, which was primarily driven by an increase in overall growth in our global network of funding and disbursement partnerships, and an increase in volume of customer transactions. Specifically, as a result of both growth and timing, we saw an increase in disbursement prefunding of $6.2 million and customer funds receivable of $59.4 million, offset by an increase in customer liabilities of $14.7 million and accrued expenses and other liabilities, which are inclusive of disbursement postfunding liabilities and book overdrafts, of $10.4 million, which were the key drivers for the changes in our operating assets and liabilities which decreased operating cash flows by $73.7 million. This was partially offset by cash generated from our operations, when excluding the $38.0 million of noncash charges included within the $21.1 million net loss for the period.

Current wording

For the six months ended June 30, 2023, net cash used in operating activities was $54.2 million, which was primarily driven by an increase in overall growth in our global network of funding and disbursement partnerships and an increase in volume of customer transactions to support the holiday weekend, which encompassed both domestic and international holidays. Specifically, as a result of both growth and timing, we saw an increase in disbursement prefunding of $117.9 million, offset by a decrease in customer funds receivable of $54.2 million, which were the key drivers for the unfavorable changes in our operating assets and liabilities of $79.9 million. This change in our operating assets and liabilities was also partially offset by cash generated from our operations, when excluding the $72.9 million of noncash charges included within the $47.2 million net loss for the period.

Previous wording

Net cash used in investing activities was $4.3 million for the three months ended March 31, 2024, a decrease of $38.8 million, compared to net cash used in investing activities of $43.1 million for the three months ended March 31, 2023. This decrease was primarily driven by the acquisition of Rewire in the first quarter of 2023.

Current wording

Net cash used in investing activities was $8.6 million for the six months ended June 30, 2024, a decrease of $36.2 million, compared to net cash used in investing activities of $44.8 million for the six months ended June 30, 2023. This decrease was primarily driven by the acquisition of Rewire in the first quarter of 2023 of $40.9 million, offset by an increase in capitalized internal-use software costs of $4.2 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

Previous wording

Cash provided by financing activities consists primarily of borrowings on our 2021 Revolving Credit Facility, proceeds from the exercise of stock options, and proceeds from the issuance of common stock in connection with ESPP, offset by repayments of borrowings and other indebtedness.

Current wording

Cash used in financing activities consists primarily of borrowings on our 2021 Revolving Credit Facility, proceeds from the exercise of stock options, and proceeds from the issuance of common stock in connection with ESPP, offset by repayments of borrowings and other indebtedness.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was $26.1 million, an increase of $37.0 million, compared to net cash used in financing activities for the three months ended March 31, 2023 of $10.9 million. This increase was primarily driven by the net borrowings on our 2021 Revolving Credit Facility of $20.0 million in the three months ended March 31, 2024 and repayment of assumed indebtedness of $17.1 million that occurred in the three months ended March 31, 2023.

Current wording

Net cash used in financing activities for the six months ended June 30, 2024 was $118.6 million, an increase of $144.5 million, compared to net cash provided by financing activities for the six months ended June 30, 2023 of $25.9 million. This increase was primarily driven by the net repayments on our 2021 Revolving Credit Facility of $115.0 million and the settlement of amounts previously held back for the Rewire acquisition of $10.3 million in the six months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2024, other than software, cloud infrastructure, marketing, and compliance-tool related contracts entered into in the normal course of business, there were no other material changes to the contractual obligations and contingencies as disclosed in Note 18. Commitments and Contingencies and Note 20. Leases in the notes to the consolidated financial statements included in Part II, Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2023. For further discussion of commitments and contingencies, also refer to Note 16. Commitments and Contingencies of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

During the six months ended June 30, 2024, other than software, cloud infrastructure (as described below), marketing, compliance-tool related contracts, and leases (as described below) entered into in the normal course of business, there were no other material changes to the contractual obligations and contingencies as disclosed in Note 18. Commitments and Contingencies and Note 20. Leases in the notes to the consolidated financial statements included in Part II, Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2023. For further discussion of commitments and contingencies, also refer to Note 16. Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.