Remitly Global Inc

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 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.

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. As of September 30, 2024, our Remitly app had a 4.9 iOS App Store rating with approximately 2.9 million reviewers and a 4.8 Android Google Play rating with over 900,000 reviewers. App rating is based on all countries or regions and the rating may vary based on user location and device type.

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 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.

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 5,100 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 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.

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. 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

•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.

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 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 6.9 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.

Current wording

Active customers increased to approximately 7.3 million, or 35% growth, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The 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 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.

Current wording

Send volume increased 42% to $14.5 billion for the three months ended September 30, 2024, compared to $10.2 billion for the three months ended September 30, 2023, driven by the increase in active customers.

Previous wording

Send volume increased 36%, to $24.7 billion for the six months ended June 30, 2024, compared to $18.1 billion for the six months ended June 30, 2023, driven by the increase in active customers.

Current wording

Send volume increased 38%, to $39.2 billion for the nine months ended September 30, 2024, compared to $28.4 billion for the nine months ended September 30, 2023, driven by the increase in active customers.

Previous wording

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 customers with cross-border financial needs. We plan to continue to acquire new customers through digital marketing channels and word-of-mouth referrals from existing customers, and by exploring new customer acquisition channels. Given the nature of our business, new customer acquisition marketing investments may negatively impact net loss and Adjusted EBITDA in the quarter they are acquired, but are expected to favorably impact net loss and Adjusted EBITDA in subsequent periods.

Current wording

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 customers with cross-border financial needs. We plan to continue to acquire new customers through digital marketing channels and word-of-mouth referrals from existing customers, and by exploring new customer acquisition channels. Given the nature of our business, new customer acquisition marketing investments may negatively impact net loss and Adjusted EBITDA in the quarter they are acquired, but are expected to favorably impact net loss and Adjusted EBITDA in subsequent periods as many customers continue to send transactions in the periods after they are acquired.

Previous 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.

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 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

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

Current wording

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

Previous wording

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

Current wording

Comparison of the three and nine months ended September 30, 2024 and 2023

Previous 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:

Current wording

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

Previous 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.

Current wording

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

Previous 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.

Current wording

Revenue increased 39%, or $94.9 million, and 34%, or $232.5 million, for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023. The increase was primarily driven by a 35% increase in active customers period over period, continued strength in the retention of existing customers, favorable customer behavior based on foreign currency movement, 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 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.

Current wording

As a reflection of this growth, send volume increased 42% and 38% to $14.5 billion and $39.2 billion for the three and nine months ended September 30, 2024, respectively, as compared to $10.2 billion and $28.4 billion for the three and nine months ended September 30, 2023, respectively.

Previous 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.

Current wording

Transaction expenses increased $29.8 million, or 35%, to $115.6 million for the three months ended September 30, 2024, compared to $85.7 million for the three months ended September 30, 2023. The increase was primarily due to a $21.9 million, or 31%, 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 $7.7 million increase in our provision for transaction losses.

Previous wording

Transaction expenses increased $43.4 million, or 28%, to $197.7 million for the six months ended June 30, 2024, compared to $154.3 million for the six months ended June 30, 2023. The increase was primarily due to a $33.7 million, or 27%, 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 $8.9 million increase in our provision for fraud and other losses.

Current wording

Transaction expenses increased $73.2 million, or 31%, to $313.2 million for the nine months ended September 30, 2024, compared to $240.0 million for the nine months ended September 30, 2023. The increase was primarily due to a $55.6 million, or 29%, 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 $16.6 million increase in our provision for transaction losses.

Previous wording

As a percentage of revenue, transaction expenses increased to 35% for the three months ended June 30, 2024, as compared to 34% for the three months ended June 30, 2023.

Current wording

As a percentage of revenue, transaction expenses decreased to 34% for both the three and nine months ended September 30, 2024, as compared to 35% for both the three and nine months ended September 30, 2023.

Previous 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).

Current wording

Customer support and operations expenses increased $0.6 million, or 3%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily driven by a $1.3 million increase in third-party personnel costs to support customer operations compared to the three months ended September 30, 2023. This was partially offset by $0.7 million in restructuring costs incurred during the three months ended September 30, 2023 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

Customer support and operations expenses decreased $1.5 million, or 7%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease was primarily driven by a $1.2 million decrease in personnel-related costs driven by a decrease in customer support and operations headcount compared to the three months ended June 30, 2023.

Current wording

Customer support and operations expenses decreased $0.7 million, or 1%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The decrease was primarily driven by a $0.5 million decrease in personnel-related costs driven by a decrease in customer support and operations headcount and a $0.4 million decrease in other customer support and operating expenses compared to the nine months ended September 30, 2023.

Previous 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.

Current wording

As a percentage of revenue, customer support and operations expenses decreased to 7% for both the three and nine months ended September 30, 2024, from 9% for both the three and nine months ended September 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 $23.5 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.

Current wording

Marketing expenses increased $13.4 million, or 22%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to an increase of $10.8 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 $1.9 million, driven by a 19% increase in marketing headcount compared to the three months ended September 30, 2023.

Previous wording

Marketing expenses increased $47.3 million, or 48%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to an increase of $40.8 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 $5.2 million, driven by a 16% increase in marketing headcount compared to the six months ended June 30, 2023.

Current wording

Marketing expenses increased $60.8 million, or 38%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to an increase of $51.6 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 $7.1 million, driven by a 23% increase in marketing headcount compared to the nine months ended September 30, 2023.

Previous 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.

Current wording

Technology and development expenses increased $11.4 million, or 20%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was driven by $9.7 million in personnel-related expenses, net of personnel-related expenses capitalized as internal-use software, resulting from a 22% increase in headcount compared to the three months ended September 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

Technology and development expenses increased $27.1 million, or 26%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was driven by $22.3 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 six 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 $4.0 million increase in software costs for cloud services to support incremental transaction volume.

Current wording

Technology and development expenses increased $38.5 million, or 24%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was driven by $32.0 million in personnel-related expenses, net of personnel-related expenses capitalized as internal-use software, resulting from a 27% increase in headcount compared to the nine months ended September 30, 2023, as part of our continued investment in our technology platform. The increase in technology and development expense was also driven by a $6.0 million increase in software costs for cloud services to support incremental transaction volume.

Previous wording

General and administrative expenses increased $6.4 million, or 16%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was primarily driven by a $5.9 million increase in personnel-related expenses resulting from a 13% increase in headcount compared to the three months ended June 30, 2023.

Current wording

General and administrative expenses increased $1.1 million, or 2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily driven by a $4.9 million increase in personnel-related expenses resulting from a 24% increase in headcount compared to the three months ended September 30, 2023. This was partially offset by a $2.0 million decrease in the fair market value of our charitable contributions related to our annual Pledge 1% donation and $1.7 million reduction in professional fees.

Previous 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.

Current wording

As a percentage of revenue, general and administrative expenses decreased to 15% for both the three and nine months ended September 30, 2024, from 21% and 19% for the three and nine months ended September 30, 2023, respectively, as we continue to leverage scale in our general and administrative functions.

Previous 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.

Current wording

Depreciation and amortization increased $1.2 million and $2.6 million, or 36% and 27%, respectively, for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023. The increase is primarily driven by an increase in amortization of internal-use software.

Previous wording

Interest income increased $0.6 million and $0.8 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. These increases are primarily due to an increase in interest rates and an increase in average invested balances throughout the quarter.

Current wording

Interest income increased $0.3 million and $1.0 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. These increases are primarily due to an increase in average invested balances throughout the periods.

Previous wording

Interest expense increased $0.2 million and $0.5 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023, primarily due to draws on the 2021 Revolving Credit Facility.

Current wording

Interest expense increased $0.2 million and $0.7 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023, primarily due to draws on the 2021 Revolving Credit Facility.

Previous 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.

Current wording

The provision for income taxes increased $1.6 million and $5.7 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 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 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.

Current wording

We use Adjusted EBITDA, a non-GAAP financial measure to supplement net income (loss). Adjusted EBITDA is calculated as net income (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

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:

Current wording

The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:

Previous 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.

Current wording

(2)Acquisition, integration, restructuring, and other costs for the nine months ended September 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 September 30, 2023 consisted primarily of $1.4 million in restructuring charges incurred, $0.9 million related to the change in the fair value of the holdback liability, and $0.6 million of expenses incurred in connection with the acquisition and integration of Rewire. Acquisition, integration, restructuring, and other costs for the nine months ended September 30, 2023 consisted primarily of $1.9 million related to the change in the fair value of the holdback liability, $1.4 million in restructuring charges incurred, and $1.1 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 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.

Current wording

As of September 30, 2024 and December 31, 2023, our principal sources of liquidity were cash and cash equivalents of $324.4 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 nine months ended September 30, 2024 and 2023, the average term of outstanding borrowings under our 2021 Revolving Credit Facility was approximately four days. During the nine months ended September 30, 2024, we cumulatively borrowed $863.0 million against this credit facility and repaid $993.0 million. 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 nine months ended September 30, 2024. As of September 30, 2024, we have unused borrowing capacity of $276.3 million.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $7.9 million, which was primarily driven by timing impacts of current growth in our global network. Specifically, as a result of both growth and timing, we saw an increase in customer funds receivable of $82.1 million and a decrease in customer liabilities of $10.7 million, offset by a decrease in disbursement prefunding of $45.1 million, which were the key drivers for the changes in our operating assets and liabilities which decreased operating cash flows by $53.8 million. This was partially offset by cash generated from our operations, when excluding the $79.0 million of noncash charges included within the $33.2 million net loss for the period.

Current wording

For the nine months ended September 30, 2024, net cash provided by operating activities was $138.9 million, which was primarily driven by timing impacts of current growth in our global network. Specifically, as a result of both growth and timing, we saw an increase in cash flow related to customer funds working capital changes of $63.8 million related to combined customer funds receivable, customer liabilities, disbursement prefunding, and trade settlement liability. In addition to these and other changes in working capital, the cash generated from operations reflects the $31.3 million net loss for the period exclusive of the $125.6 million of noncash charges.

Previous 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.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities was $25.2 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. Specifically, as a result of both growth and timing, we saw an increase in disbursement prefunding of $52.2 million and customer funds receivable of $68.6 million, offset by an increase in customer liabilities of $29.2 million and accrued expenses and other liabilities, which is inclusive of our trade settlement liability, of $28.1 million, which were the key drivers for the unfavorable changes in our operating assets and liabilities of $62.3 million. This change in our operating assets and liabilities was also partially offset by cash generated from our operations, when excluding the $119.9 million of noncash charges included within the $82.8 million net loss for the period.

Previous 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.

Current wording

Net cash used in investing activities was $12.5 million for the nine months ended September 30, 2024, a decrease of $35.0 million, compared to net cash used in investing activities of $47.5 million for the nine months ended September 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 $5.0 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

Previous 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.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2024 was $128.9 million, an increase of $125.4 million, compared to net cash used in financing activities for the nine months ended September 30, 2023 of $3.5 million. The increase was primarily driven by the increase in net repayments on our 2021 Revolving Credit Facility of $130.0 million and the settlement of amounts previously held back for the Rewire acquisition of $10.3 million in the nine months ended September 30, 2024. offset by the repayment of assumed indebtedness of $17.1 million that occurred in the nine months ended September 30, 2023.

Previous 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.

Current wording

During the nine months ended September 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 15. 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.