Remitly Global Inc

Previous wording

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements, and the accompanying notes included elsewhere in this Annual Report on Form 10-K, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, financial condition, operating results, and future prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Current wording

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements, and the accompanying notes included elsewhere in this Annual Report on Form 10-K, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, financial condition, operating results, reputation, and future prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Previous wording

•We operate in a highly competitive and evolving market and may be unable to compete successfully against existing and future competitors which employ a variety of existing business models and technologies or new innovations;

Current wording

•We operate in a highly competitive and evolving industry and may be unable to compete successfully against existing and future competitors that employ a variety of existing business models and technologies or new innovations;

Previous wording

•If we are not able to innovate, improve existing products, and develop new products that achieve market acceptance, our growth, business, operating results, financial condition, and future prospects could be materially and adversely affected;

Current wording

•We may not be able to innovate, improve existing products, or develop new products that achieve acceptance;

Previous wording

•We partner with third parties to support fulfillment of our service, including risk management, payment processing, customer support, cloud hosting, and disbursement, which exposes us to risks outside our direct control;

Current wording

•We partner with third parties to support fulfillment of our service, including risk management, payment processing, customer support, cloud hosting, and disbursement, which exposes us to risks outside of our control;

Previous wording

•Use of our platform for illegal or fraudulent activities could harm our business, reputation, financial condition, and operating results;

Current wording

•Use of our service for illegal or fraudulent activities could harm our business, financial condition, operating results, reputation, and future prospects;

Previous wording

Failure to comply with sanctions laws, anti-terrorist financing laws, anti-money laundering laws, and similar laws associated with our activities outside of the United States, and anti-corruption laws could subject us to penalties and other adverse consequences.

Current wording

•Failure to comply with anti-corruption laws and sanctions laws, anti-terrorist financing laws, anti-money laundering laws, and similar laws could subject us to penalties and other adverse consequences;

Previous wording

If our disbursement partners do not provide a positive recipient experience, our business would be harmed.

Current wording

•If our disbursement partners do not provide a positive recipient experience, our business, financial condition, operating results, and future prospects could be harmed;

Previous wording

•Risks associated with operations outside the United States and foreign currencies could adversely affect our business, financial condition, results of operations, and cash flows;

Current wording

•Risks associated with operations outside the United States and foreign currencies could adversely affect our business, financial condition, operating results, and future prospects;

Previous wording

•If one or more of our counterparties, including financial institutions, aggregators, and local cash pick-up institutions where we have cash on deposit, or our lenders and potential hedging counterparties, default on their financial or performance obligations to us or fail, we may incur significant losses; and

Current wording

•If one or more of our counterparties, including financial institutions, aggregators, and local cash pick-up institutions where we have cash on deposit, or our lenders and potential hedging counterparties, default on their financial or performance obligations to us or fail, we may incur material losses; and

Previous wording

•Our customers and business operations are exposed to macroeconomic conditions and geopolitical forces in developing regions and regions that account for a significant amount of our send volume, which exposes us to risk of loss.

Current wording

•Our customers and business operations in countries and regions that account for a significant amount of our send volume and our operations are exposed to rapid changes in laws and the enforcement of laws, macroeconomic conditions, and geopolitical developments that expose us to a risk of loss and that could adversely affect our business, financial condition, operating results, and future prospects.

Previous wording

We operate in a highly competitive and evolving market and may be unable to compete successfully against existing and future competitors which employ a variety of existing business models and technologies or new innovations.

Current wording

We operate in a highly competitive and evolving industry and may be unable to compete successfully against existing and future competitors that employ a variety of existing business models and technologies or new innovations.

Previous wording

The market for remittances is global, highly competitive, and fragmented and includes a mix of traditional and digital players. This includes monoline remittance companies as well as more platform-based competitors that offer multiple financial services, including remittances. These competitors include traditional banks, digital-first cross-border payment providers, online-only banks, and cryptocurrency providers. Some of the competitors are significantly larger than we are, have longer operating histories, have more scale and name recognition, and more resources to deploy. We also compete against smaller, country-specific companies, banks, and informal person-to-person money transfer service providers that may have more ability to effectively tailor products and services, marketing, and regulatory compliance to local preferences and requirements.

Current wording

The industry for remittances is global, highly competitive, and fragmented and includes a mix of traditional and digital players. This includes monoline remittance companies as well as competitors that offer multiple financial services, including remittances. These competitors include traditional banks, digital-first cross-border payment providers, online-only banks, and cryptocurrency providers. Some competitors are significantly larger than we are and have longer operating histories, more scale and name recognition, and more resources to deploy. We also compete against smaller, country-specific companies, banks, and informal person-to-person money transfer service providers that may have more ability to effectively tailor products and services, marketing, and regulatory compliance to local preferences and requirements.

Previous wording

Some of these competitors may introduce new products or services that render us unable to retain our existing customers or attract new customers at prices that are consistent with our pricing model and operating budget. In addition, these competitors use a variety of funding, money measurement and pricing methodologies which may be more attractive to customers in some geographies or demographics. Our pricing strategy for our cross-border payments may also prove to be unappealing to our customers for other reasons, too. If this were to occur, it is possible that we would have to change our pricing strategies or reduce our prices, which could harm our revenue and operating results.

Current wording

Some of these competitors may introduce new products or services that render us unable to retain our existing customers or attract new customers at prices that are consistent with our pricing model and operating budget. In addition, these competitors use a variety of funding, money measurement and pricing methodologies which may be more attractive to customers in some geographies or demographics. Our pricing strategy for our cross-border payments may also prove to be unappealing to our customers for other reasons, too. If this were to occur, it is possible that we would have to change our pricing strategies or reduce our prices, which could harm our business, financial condition, operating results, and future prospects.

Previous wording

In addition, the broader financial services sector is experiencing rapid evolution in technologies and there has recently been significant advancement in the development of neobanking, as well as other real time payment technologies. Any failure to timely anticipate changes in customer behavior related to new payment technologies, or to successfully integrate such technologies into our services, could harm our ability to compete and result in a loss of customers and corresponding loss of revenue.

Current wording

In addition, the broader financial services sector is experiencing rapid evolution in technologies, and there has recently been significant advancement in the development of neobanking, as well as other real-time payment technologies, including cryptocurrency and stablecoins. Any failure to timely anticipate changes in customer behavior related to new payment technologies, or to successfully integrate such technologies into our services, could harm our ability to compete and result in a loss of customers and corresponding loss of revenue.

Previous wording

Our products and services rely on a technology-driven platform that requires innovation to remain competitive. Our process for innovation is complex and relies upon both internally developed and third-party technologies and services, including machine learning, cloud-based, and other emerging technologies. We may not be able to make product or technological improvements as quickly as our competitors and/or as demanded by our customers, or to market them effectively, which could harm our ability to attract or retain customers. This includes the incorporation of artificial intelligence (AI) technologies. In addition, we continue to develop new products and services which require ongoing investment. It is possible that these new products may not return our investment or be profitable, or may experience disruptions in development or availability in the market as a result of a variety of factors outside our control, which may have an adverse effect on our business and financial results. See the section titled “Risk Factors—General Risks.”Additionally, the majority of our customers access our products through our mobile website and mobile app, and we must ensure that our offerings are optimized for mobile devices and that our mobile apps are interoperable with popular third-party mobile operating systems such as Google Android and Apple iOS. If we are unable to successfully and in a timely fashion innovate and improve our existing products that achieve market acceptance, and continue to deliver a superior customer experience, our growth, business, operating results, financial condition, and future prospects could be materially and adversely affected.

Current wording

It is also possible that these new products may not return our investment or be profitable, or may experience disruptions in development or availability as a result of a variety of factors outside our control, which may have an adverse effect on our business, financial condition, operating results, and future prospects. See the section titled “Risk Factors—General Risks.” Additionally, the majority of our customers access our products through our website and mobile app, and we must ensure that our offerings are optimized for such devices and that our mobile apps are interoperable with popular third-party mobile operating systems such as Google Android and Apple iOS. If we are unable to successfully and in a timely fashion innovate and improve our existing products and achieve acceptance, and continue to deliver a superior customer experience, our growth, business, financial condition, operating results, and future prospects could be impacted.

Previous wording

We have grown rapidly in recent years and have limited operating experience at our current scale of operations. If we are unable to manage our growth effectively, our business and operating results may be materially and adversely affected. We also may not be able to sustain our growth rate in the future.

Current wording

We have grown rapidly in recent years and have limited operating experience at our current scale of operations. If we are unable to manage our growth effectively, our business and operating results may be impacted. We also may not be able to sustain our growth rate in the future.

Previous wording

We have experienced rapid growth in recent periods in our headcount, licensing portfolio, geographic footprint, and transaction volume, all of which place substantial demands on our management and operational resources. We will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures to manage this growth.

Current wording

We have experienced rapid growth in recent periods, which places substantial demands on our management and operational resources. We expect we will need to continue to enhance our operational, financial, and management controls and our reporting systems and procedures to manage this growth.

Previous wording

Further, as we continue to grow, our business becomes increasingly complex and requires more resources. We have expended and anticipate continuing to expend, significant resources on expanding our infrastructure, streamlining our business and management processes, and other operational areas. Continued growth could strain our existing resources and we could experience operating difficulties in managing our business across numerous jurisdictions. Failure to effectively scale could harm our future success, including our ability to retain and recruit personnel and to effectively focus on our growth strategy.

Current wording

Further, as we continue to grow, our business becomes increasingly complex and requires more resources. We have expended and anticipate continuing to expend, significant resources on expanding our infrastructure, streamlining our business and management processes, and expanding and streamlining other operational areas. Continued growth could strain our existing resources, and we could experience operating difficulties in managing our business across numerous jurisdictions. Failure to effectively scale could harm our future success, including our ability to retain and recruit personnel and to effectively focus on our growth strategy. Our limited operating history and experience may also lead to deficiencies in our governance and operational structures, including with respect to our internal controls, resulting in inefficient decision-making, internal oversight, or other operational inefficiencies, regulatory risks, failures to identify and capitalize on growth opportunities, and reputational damage. If our controls, policies, and procedures are not fully effective or we are not successful in identifying and mitigating significant risks to which we are or may be exposed, we may suffer uninsured liability, harm to our reputation, or be subject to litigation or regulatory actions that could affect our business, financial condition, operating results, and future prospects.

Previous wording

We partner with third parties to support fulfillment of our service, including risk management, payment processing, customer support, cloud hosting, and disbursement, which exposes us to risks outside our direct control.

Current wording

We partner with third parties to support fulfillment of our service, including risk management, payment processing, customer support, cloud hosting, and disbursement, which exposes us to risks outside of our control.

Previous wording

We partner with a variety of third parties to fulfill our services. For example, we integrate third-party technologies into our proprietary KYC and risk management systems and information security program, and we also partner with an extensive network of third parties to deliver payment processing for customers and disbursement of funds to recipients. In addition, in certain markets there is a limited number of third-party service providers capable of processing payments on our behalf. Any failure or disruption to the services provided by these third parties could cause disruption or delay the delivery of our services and negatively impact our customer experience. For example, any natural disaster that affects the ability of our payment processors to process funds could cause delays to our disbursement process and thereby negatively impact our customer experience and cause our express or economy delivery guarantees to fail. Additionally, if a payment processor experiences a service outage or service interruption that results in our being unable to collect funds from customers, our liquidity could be harmed and we may not meet our capital or other regulatory requirements.

Current wording

We partner with a variety of third parties to fulfill our services. For example, we integrate third-party technologies into our proprietary customer due diligence and risk management systems and information security program, and we also partner with an extensive network of third parties to deliver payment processing for customers and disbursement of funds to recipients. In addition, in certain regions there is a limited number of third-party service providers capable of processing payments on our behalf. Any failure or disruption to the services provided by these third parties could cause disruption or delay the delivery of our services and negatively impact our customer experience.

Previous wording

Our business is largely driven by and reliant on customer trust in our handling of money remittances. The pricing and reliability of our service, the security of personal information (including sensitive personal information) of our customers, and a responsive and effective customer support function are each critical elements for the maintenance of this trust. For example, any significant interruption in either our internal or our partners’ risk management, payment processing, or disbursement systems could reduce customer confidence in our services. In addition, any actual or reported cyberattack, cybersecurity breach, service outage, or other similar incident with respect to our systems or networks, or violation of our privacy or cybersecurity policies, or applicable legal, regulatory, or contractual obligations that results in a compromise of customer data or causes customers to believe their data has been compromised could have a significant negative effect on our business. Legal claims and regulatory enforcement actions could also arise in response to these events, which would further exacerbate erosion of customer trust and potentially result in operating losses and liabilities. If we are unable to maintain affordable pricing, deliver services reliably and securely, or address customer support issues in an effective and timely manner, our reputation and our business and operating results could suffer material harm. In addition, any erosion in confidence in digital financial service providers as a means to transfer money generally could have a similar negative effect on us.

Current wording

Our business is largely driven by and reliant on customer trust in our handling of money remittances. The pricing and reliability of our service, the security of personal information (including sensitive personal information) of our customers, and a responsive and effective customer support function are each critical elements for the maintenance of this trust. Any significant interruption in either our internal or our partners’ risk management, payment processing, or disbursement systems could reduce customer confidence in our services. In addition, any actual or reported cyberattack, cybersecurity breach, service outage, or other similar incident with respect to our systems or networks, or violation of our privacy or cybersecurity policies, or applicable legal, regulatory, or contractual obligations that results in a compromise of customer data or causes customers to believe their data has been compromised could have a significant negative effect on our business. Legal claims and regulatory enforcement actions could also arise in response to these events, which would further exacerbate erosion of customer trust and potentially result in operating losses and liabilities. If we are unable to maintain affordable pricing, deliver services reliably and securely, or address customer support issues in an effective and timely manner, our business, financial condition, operating results, reputation, and future prospects could be harmed. In addition, any erosion in confidence in digital financial service providers as a means to transfer money generally could have a similar negative effect on us.

Previous wording

Our business is subject to the risk of financial losses as a result of operational errors, fraudulent activity, employee misconduct, or other similar actions or errors on our platform or our partners’ platform solutions. We have been in the past, and will continue to be, subject to losses due to software errors in our platform, operational errors by our employees, or third-party service providers. For example, incorrect input of payments into a third-party processor’s systems has in the past affected the issuance rebates we received from our card services provider, which in turn negatively impacted revenue. In addition, we also are regularly targeted by parties who seek to commit acts of financial fraud, using a variety of techniques, including stolen bank accounts, compromised business email accounts, employee fraud, account takeover, false applications, and check fraud. We are also routinely targeted for illegitimate transactions such as money laundering. These risks are inherently greater for us because our corridors for remittances are generally from developed to developing economies, which have traditionally been highly targeted by bad actors perpetrating fraud or other unwanted activity. The methods used to perpetrate these illegal activities are continually evolving, and we expend considerable resources to monitor and prevent them. Our risk management efforts may not effectively prevent, and we may suffer losses from, these errors and activities and, in some cases, our usual risk allocation agreements and insurance coverages may not be sufficient to cover these losses. We have experienced transaction losses of $39.0 million, or 0.10%, $41.9 million, or 0.15%, and $29.7 million, or 0.15%, of total send volume in connection with such errors, fraud, and misconduct in the years ended December 31, 2023, 2022, and 2021, respectively. We expect that losses of similar or greater magnitude may occur again in the future. If any of these errors or illegitimate or fraudulent activities are significant, we may be subject to regulatory enforcement actions and suffer significant losses or reputational harm, and our business, operating results, and financial condition could be adversely affected.

Current wording

Our business is subject to the risk of financial losses as a result of operational errors, fraudulent activity, employee misconduct, or other similar actions or errors on our or our partners’ solutions. Such behavior, either by our employees, vendors, counterparties, or other third parties, may include fraudulent actions, breaches of applicable laws, rules, regulations, as well as contractual obligations, including confidentiality or non-disclosure agreements, or failure to adhere to our policies and procedures or those of our partners and other counterparties. We have been, in the past, and will continue to be, subject to losses due to software errors in our systems and operational errors by our employees and third-party service providers. In addition, we also are regularly targeted by parties who seek to commit acts of financial fraud, using a variety of techniques, including stolen bank accounts, compromised business email accounts, employee fraud, account takeover, and false account creation. We are also routinely targeted for illegitimate transactions, including transactions to facilitate money laundering, and transactions in which customers authorize transfers requested by third parties under false or misleading pretenses (“scams”). These risks are inherently greater for us because many of our corridors for remittances are from developed to developing economies, which have traditionally been highly targeted by bad actors perpetrating fraud or other unwanted activity. We also in certain instances have a business practice of transferring money to recipients before funds are actually received from our customers, which also increases these risks. The methods used to perpetrate these illegal activities are continually evolving, and we expend considerable resources to detect, monitor, and prevent them. Our risk management efforts may not effectively prevent, and we may suffer losses from, these errors and activities and, in some cases, our usual risk allocation agreements and insurance coverages may not be sufficient to cover these losses. We have experienced transaction losses of $57.9 million, or 0.11%, $39.0 million, or 0.10%, and $41.9 million, or 0.15%, of total send volume in connection with such errors, fraud, and misconduct in the years ended December 31, 2024, 2023, and 2022, respectively. We expect that losses of similar or greater magnitude may occur again in the future. If any of these errors or illegitimate or fraudulent activities are significant, we may be subject to regulatory enforcement actions and termination of services provided by third parties and suffer significant losses or reputational harm, and our business, financial condition, operating results, and future prospects could be adversely affected.

Previous wording

We have a history of operating losses and there is no assurance that our business will become profitable or that, if we achieve profitability, we will be able to sustain it.

Current wording

We have a history of operating losses and there is no assurance that our business will become consistently profitable.

Previous wording

We were incorporated in 2011 and we have experienced net losses since inception. We generated net losses of $117.8 million, $114.0 million, and $38.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. While we have experienced significant revenue increases and achieved profitability on an Adjusted EBITDA basis in recent periods, if the assumptions we use to plan our business are incorrect or change, or if we are unable to maintain consistent revenue, it may be difficult to achieve and maintain profitability. Our revenue from any prior quarterly or annual periods should not be relied upon as an indication of our future revenue or revenue growth. We have historically spent, and intend to continue to spend, significant funds to further develop and secure our technology platform, develop new products and functionalities, invest in marketing programs to drive new customer acquisition, expand strategic partner integrations, and support international expansion into new payment corridors. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. We will also face increased compliance and security costs associated with growth, the expansion of our customer base and corridors, and being a public company. Our history of net losses has also, at times, caused us to draw on our then-outstanding revolving lines of credit to satisfy our capital requirements and any inability to maintain or secure financing on satisfactory terms could materially and adversely impact our business. Our financial performance each quarter is also impacted by circumstances beyond our control, such as our ability to retain our customers, ability to efficiently attract new customers, corridor mix, revenue mix, and seasonality. We may incur significant losses in the future for several reasons, including the other risks described herein, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and common stock may be adversely affected.

Current wording

We were incorporated in 2011 and we have experienced annual net losses since inception. We generated net losses of $37.0 million, $117.8 million, and $114.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. While we have experienced significant revenue increases, achieved profitability on an Adjusted EBITDA basis in recent periods, and achieved profitability on a GAAP basis in the third quarter of 2024, if the assumptions we use to plan our business are incorrect or change, or if we are unable to maintain consistent revenue, it may be difficult to maintain profitability. Our revenue from any prior quarterly or annual periods should not be relied upon as an indication of our future revenue or revenue growth. We have historically spent, and intend to continue to spend, significant funds to further develop and secure our services, develop new products and functionalities, invest in marketing programs to drive new customer acquisition, expand strategic partner integrations, and support international expansion into new payment corridors. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. We will also face increased compliance and security costs associated with growth, the expansion of our customer base and corridors, and being a public company. Our financial performance each quarter is also impacted by circumstances beyond our control, such as corridor mix, revenue mix, and seasonality. We may incur significant losses in the future for several reasons, including the other risks described herein, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to sustain profitability, our business, financial condition, operating results, and future prospects may be adversely affected.

Previous wording

Our revenue was $944.3 million, $653.6 million, and $458.6 million, and our send volume was $39.5 billion, $28.6 billion, and $20.4 billion, for the years ended December 31, 2023, 2022, and 2021, respectively. Although a large market share for remittance services remains untapped by us, we have recently experienced significant growth in our revenue and send volume. However, even if our revenue continues to increase, we expect that our growth rate will likely decline in the future as a result of a variety of factors, including the increasing scale of our business. Overall growth of our revenue depends on a number of factors, including our ability to:

Current wording

Our revenue was $1,264.0 million, $944.3 million, and $653.6 million, and our send volume was $54.6 billion, $39.5 billion, and $28.6 billion, for the years ended December 31, 2024, 2023, and 2022, respectively. Although a large market segment for remittance services remains untapped by us, we have recently experienced significant growth in our revenue and send volume. However, even if our revenue continues to increase, we expect that our growth rate will likely decline in the future as a result of a variety of factors, including the increasing scale of our business. Overall growth of our revenue depends on a number of factors, including our ability to:

Previous wording

•maintain the rates at which customers transact on our platform;

Current wording

•maintain the rates at which customers transact on our service;

Previous wording

•expand the functionality and scope of the products we offer on our platform;

Current wording

•expand the functionality and scope of the products we offer, including by successfully developing and commercializing products and services complementary to our current offerings;

Previous wording

•introduce our services in new payment corridors and markets, including maintaining existing and obtaining new money transmitter licenses;

Current wording

•introduce our services in new payment corridors and jurisdictions, including maintaining existing and obtaining new money transmitter and payment services licenses;

Previous wording

We may not successfully accomplish any of these objectives, which makes it difficult for us to forecast our future operating results. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market, or if we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability. Additionally if we fail to address the risks and difficulties that we face, including those associated with the factors listed above as well as those described elsewhere in this “Risk Factors” section, our growth rate will be adversely affected. You should not rely on our revenue for any prior quarterly or annual periods as any indication of our future revenue or revenue growth.

Current wording

We may not successfully accomplish any of these objectives, which makes it difficult for us to forecast our future operating results. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our industry, or if we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to sustain profitability. Additionally if we fail to address the risks and difficulties that we face, including those associated with the factors listed above as well as those described elsewhere in this “Risk Factors” section, our growth rate may be adversely affected. You should not rely on our revenue for any prior quarterly or annual periods as any indication of our future revenue or revenue growth.

Previous wording

Cyberattacks, cybersecurity breaches, service outages, and other similar incidents continue to increase in frequency and severity, evolve in nature, and become more sophisticated (including through the increased use of AI), and may evade detection for substantial periods of time. Moreover, we regularly encounter attempts to create false or undesirable accounts or take other actions on our platform for purposes such as spamming, spreading misinformation, or other objectionable ends. Threats to our computer systems and networks and those of third parties with whom we partner come from a variety of sources, including organized criminal threat actors, terrorists, hacktivists, nation states, state-sponsored organizations, and other external threat actors with significant financial and technological resources, any of which may see the effectiveness of their efforts enhanced by the use of AI. In addition, the trend towards working from home and using private residential networks to access the internet may further exacerbate risks associated with cyberattacks, cybersecurity breaches, service outages, and other similar incidents as private work environments and electronic connections to our work environment may not have the same security measures deployed in our offices. We, like other financial technology organizations, have experienced from time to time, and may experience in the future, cybersecurity incidents, including, among other things, advanced and persisting cyberattacks, ransomware, cyber extortion, phishing, and social engineering schemes, the introduction of computer viruses or other malware, computer hacking, fraudulent use attempts, denial-of-service attacks, credential stuffing, and the physical destruction of all or portions of our IT infrastructure and those of third parties with whom we partner, due to, among other things, human error, fraud, malice, malfeasance, insider threats, system errors or vulnerabilities, accidental technological failure, or other irregularities on the part of employees, contractors, vendors, or other third parties. Because we rely on third parties in our business, we rely on the cybersecurity practices and policies adopted by such third parties, including our disbursement partners and downstream service providers. Our ability to monitor the cybersecurity practices of third parties with whom we partner is limited, and there can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the systems or networks owned or controlled by such third parties. Additionally, any contractual protections with such third parties, including our right to indemnification, if any at all, may be limited or insufficient to prevent a negative impact on our business from such compromise or failure. Any such compromises or failures with respect to our systems or networks, including the systems or networks owned or controlled by third parties with whom we partner, could, among other things: ca…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Cyberattacks, cybersecurity breaches, service outages, and other similar incidents continue to increase in frequency and severity, evolve in nature, and become more sophisticated (including through the increased use of AI), and may evade detection for substantial periods of time. Moreover, we regularly encounter attempts to create false or undesirable accounts or take other actions on our systems for purposes such as spamming, spreading misinformation, or other objectionable ends. Threats to our computer systems and networks and those of third parties with whom we partner come from a variety of sources, including organized criminal threat actors, terrorists, hacktivists, nation states, state-sponsored organizations, and other external threat actors with significant financial and technological resources, any of which may see the effectiveness of their efforts enhanced by the use of AI. In addition, working from home and using private residential networks to access the internet may further exacerbate risks associated with cyberattacks, cybersecurity breaches, service outages, and other similar incidents as private work environments and electronic connections to our work environment may not have the same security measures as those deployed in our offices. We, like other financial technology organizations, have experienced from time to time, and may experience in the future, cybersecurity incidents, including, among other things, advanced and persisting cyberattacks, ransomware, cyber extortion, phishing, and social engineering schemes, the introduction of computer viruses or other malware, computer hacking, fraudulent use attempts (including attempts to create false or undesirable accounts or take other actions on our service for purposes such as spamming, spreading misinformation, or other objectionable ends), denial-of-service attacks, credential stuffing, and the physical destruction of all or portions of our IT infrastructure and those of third parties with whom we partner, due to, among other things, human error, fraud, malice, malfeasance, insider threats, system errors or vulnerabilities, accidental technological failure, or other irregularities on the part of employees, contractors, vendors, or other third parties.

Previous wording

•liquidity risks or a negative impact on our relationships with our financial services providers, including payment processors or relevant network organizations, such as Visa or Mastercard, disbursement partners, and other third parties.

Current wording

•liquidity risks or a negative impact on our relationships with our financial services providers, including payment processors or relevant network organizations, disbursement partners, and other third parties.

Previous wording

Further, we could be forced to expend significant financial and operational resources in response to such incidents, including repairing system damage, increasing security costs, investigating and remediating any cybersecurity vulnerabilities, complying with data breach notification obligations and applicable laws and regulations, and defending against and resolving legal and regulatory claims, all of which could divert resources and the attention of our management and key personnel away from our business operations. As a result, any cyberattack, cybersecurity breach, service outage, or other similar incident could harm our business, reputation, financial condition, and operating results.

Current wording

Further, we could be forced to expend significant financial and operational resources in response to such incidents, including repairing system damage, increasing security costs, investigating and remediating any cybersecurity vulnerabilities, complying with data breach notification obligations and applicable laws and regulations, and defending against and resolving legal and regulatory claims, all of which could divert resources and the attention of our management and key personnel away from our business operations. Our efforts to remediate or mitigate any such incident may also be unsuccessful due to, among other things: software bugs or other technical malfunctions; employee, contractor, or third-party error or malfeasance; government surveillance; or other threats that evolve. As a result, any cyberattack, cybersecurity breach, service outage, or other similar incident could harm our business, financial condition, operating results, reputation, and future prospects.

Previous wording

The various privacy and cybersecurity laws, rules, regulations, industry standards, and other obligations with which we must comply, including with respect to technologies, such as cloud computing, AI, machine learning, cryptocurrency, and blockchain technology, are complex and evolving. In addition, state, federal, and foreign lawmakers and regulatory authorities have increased their attention on the collection, use, storage, transmission, disclosure, deletion, security, and other processing of personal information, and increasing fraudulent activity and cyberattacks have encouraged further legislative and regulatory intervention in the financial technology industry. Moreover, many jurisdictions in which we operate have or are developing laws and regulations that protect the privacy and security of sensitive and personal information. Further, we have internal and publicly posted privacy policies regarding our collection, use, storage, transmission, disclosure, deletion, security, and other processing of personal information, and the publication of such privacy policies and other documentation that provide commitments about privacy and cybersecurity can subject us to potential enforcement actions and litigation if they are found to be deceptive, unfair, or otherwise misrepresentative of our actual practices. Our agreements with third parties, including significant agreements with payment processors, credit card and debit card issuers, and bank partners, contain contractual commitments with which we are required to adhere related to privacy and cybersecurity.

Current wording

The various privacy and cybersecurity laws, rules, regulations, industry standards, and other obligations with which we must comply, including with respect to technologies, such as cloud computing, AI, and machine learning, are complex and evolving. In addition, state, federal, and foreign lawmakers and regulatory authorities have increased their attention on the collection, use, receipt, storage, transmission, disclosure, and other processing of personal information, and increasing fraudulent activity and cyberattacks have encouraged further legislative and regulatory intervention in the financial technology industry. Moreover, many jurisdictions in which we operate have or are developing laws and regulations that protect the privacy and security of sensitive and personal information. Further, we have internal and publicly posted privacy policies regarding our collection, use, receipt, storage, transmission, disclosure, and other processing of personal information, and the publication of such privacy policies and other documentation that provide commitments about privacy and cybersecurity can subject us to potential enforcement actions and litigation if they are found to be deceptive, unfair, or otherwise misrepresentative of our actual practices. Our agreements with third parties, including significant agreements with payment processors, credit card and debit card issuers, and bank partners, contain contractual commitments with which we are required to adhere related to privacy and cybersecurity.

Previous wording

Compliance with such laws, rules, regulations, industry standards, and other obligations requires that we expend significant resources, and we cannot guarantee that we will be able to successfully comply with all such privacy and cybersecurity obligations, especially where they do or may in the future conflict with one another, nor can we predict the extent to which such new and evolving regulatory and legal requirements will impact our business strategies and the cost or availability of previously useful personal information, increase our potential liability and compliance costs, require changes in business practices and policies, or otherwise adversely affect our business. Our failure to adequately address privacy and cybersecurity-related concerns, even if unfounded, or to comply with applicable laws, rules, regulations, industry standards, and other obligations could result in regulatory or government investigations, monetary penalties, fines, sanctions, claims, litigation (including civil claims, such as representative actions and other class action-type litigation), orders to cease or change our processing of personal information, enforcement notices, assessment notices (for a compulsory audit), compensation or damages liabilities, increased cost of operations, changes to our business practices (including changes to the manner in which we transfer personal information between and among countries and regions in which we operate or the manner in which we provide our services and the geographical location or segregation of our relevant systems and operations), declines in user growth or engagement, or diversion of internal resources, all of which could have a material adverse effect on our business, reputation, financial condition, and operating results.

Current wording

Compliance with such laws, rules, regulations, industry standards, and other obligations requires that we expend significant resources, and we cannot guarantee that we will be able to successfully comply with all such privacy and cybersecurity obligations, especially where they do or may in the future conflict with one another, nor can we predict the extent to which such new and evolving regulatory and legal requirements will impact our business strategies and the cost or availability of previously useful personal information, increase our potential liability and compliance costs, require changes in business practices and policies, or otherwise adversely affect our business. Our failure to adequately address privacy and cybersecurity-related concerns, even if unfounded, or to comply with applicable laws, rules, regulations, industry standards, and other obligations could result in regulatory or government investigations, monetary penalties, fines, sanctions, claims, litigation (including civil claims, such as representative actions and other class action-type litigation), orders to cease or change our processing of personal information, enforcement notices, assessment notices (for a compulsory audit), compensation or damages liabilities, increased cost of operations, changes to our business practices (including changes to the manner in which we transfer personal information between and among countries and regions in which we operate or the manner in which we provide our services and the geographical location or segregation of our relevant systems and operations), declines in user growth or engagement, or diversion of internal resources, all of which could have a material adverse effect on our business, financial condition, operating results, reputation, and future prospects.

Previous wording

For additional discussion about privacy and the regulatory environment that we operate in, please see the section titled “Business—Privacy and Cybersecurity.”

Current wording

For additional discussion about privacy and cybersecurity and the legal and regulatory environment that we operate in, please see the section titled “Business—Privacy and Cybersecurity.”

Previous wording

Any significant interruption or failure of our system availability, including failure to successfully implement upgrades or new technologies to our mobile app or website, could adversely affect our business, financial, and operating results.

Current wording

Any significant interruption or failure of our system availability, including failure to successfully implement upgrades or new technologies to our mobile app or website, could adversely affect our business, financial condition, operating results, reputation, and future prospects.

Previous wording

The efficient and uninterrupted operation of technologies that we use to deliver our services is essential for the customer experience. This includes maintaining ready customer access and acceptable load times for our services at all times. Our systems and operations and those of third-party partners have experienced and may experience in the future interruptions or degradation of service availability due to a variety of events including cyberattacks, cybersecurity breaches, service outages, and other similar incidents, insider threats, hardware and software defects or malfunctions, development delays, installation difficulties, human error, earthquakes, hurricanes, floods, fires, and other natural disasters, public health crises (including epidemics or pandemics such as the COVID-19 pandemic), power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, or other events. In addition, our platform is currently vulnerable to downtime should a major physical disaster or other event affect the west coast of the United States, where our cloud services provider is based and our physical system architecture resides. While we have backups for these systems, our platform would be unavailable for some time were our normal systems to go down. Further, some of our systems are not fully redundant, and our disaster recovery program has not been fully tested and may not be sufficient for all eventualities. To the extent we cannot effectively address capacity constraints, upgrade our systems, or implement redundant systems as needed, and continually develop our technology platform to maintain sufficient system availability, new or existing customers may seek other services and may not return to our services as often in the future, or at all. If our service is unavailable when customers attempt to access it or it does not load as quickly as they expect, customers may lose trust in our service or determine that our services are unreliable or too slow to meet their needs. This would harm our ability to attract new customers and could decrease the frequency with which existing customers use our website and mobile solutions. As a result, our business, reputation, financial results, and operating results may be harmed.

Current wording

The efficient and uninterrupted operation of technologies that we use to deliver our services is essential for the customer experience. This includes maintaining ready customer access and acceptable load times for our services at all times. Our systems and operations and those of third-party partners have experienced and may experience in the future interruptions or degradation of service availability due to a variety of events including cyberattacks, cybersecurity breaches, service outages, and other similar incidents, insider threats, hardware and software defects or malfunctions, development delays, installation difficulties, human error, earthquakes, hurricanes, floods, fires, and other natural disasters, public health crises (including epidemics or pandemics such as the COVID-19 pandemic), power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, or other events. In addition, our service is currently vulnerable to downtime should a major physical disaster or other event affect the west coast of the United States, where our cloud services provider is based and our physical system architecture resides. While we have backups for these systems, our service would be unavailable for some time were our normal systems to go down. Further, some of our systems are not fully redundant, and our disaster recovery program has not been fully tested and may not be sufficient for all eventualities. To the extent we cannot effectively address capacity constraints, upgrade our systems, or implement redundant systems as needed, and continually develop our technology to maintain sufficient system availability, new or existing customers may seek other services and may not return to our services as often in the future, or at all. If our service is unavailable when customers attempt to access it or it does not load as quickly as they expect, customers may lose trust in our service or determine that our services are unreliable or too slow to meet their needs. This would harm our ability to attract new customers and could decrease the frequency with which existing customers use our website and mobile solutions. As a result, our business, financial condition, operating results, reputation, and future prospects could be harmed.

Previous wording

If we are unable to adequately obtain, maintain, protect, defend, or enforce our IP Rights, our business, prospects, financial condition, and operating results could be harmed.

Current wording

If we are unable to adequately obtain, maintain, protect, defend, or enforce our IP Rights, our business, financial condition, operating results, reputation, and future prospects could be harmed.

Previous wording

The Remitly brand and our proprietary technology, trademarks, service marks, trade names, copyrights, domain names, trade dress, patents, trade secrets, and other IP Rights that support that brand are important to our business. We rely on, and expect to continue to rely on, a combination of intellectual property laws, technological restrictions, provisions in our terms of service, and contractual provisions including confidentiality, invention assignment, and license agreements with our employees, contractors, consultants, and other third parties with whom we partner, to establish and protect our brand, proprietary technology, and other IP Rights. Such contractual provisions may not be self-executing and may not otherwise adequately protect our IP Rights, particularly with respect to conflicts of ownership relating to work product generated by employees, contractors, consultants, or other third parties with whom we partner, and we cannot be certain that such contractual provisions will not be breached or that third parties will not gain access to our trade secrets or other confidential information.

Current wording

Our brand and proprietary technology, trademarks, service marks, trade names, copyrights, domain names, trade dress, patents, trade secrets, and other IP Rights that support that brand are important to our business. We rely on, and expect to continue to rely on, a combination of intellectual property laws, technological restrictions, provisions in our terms of service, and contractual provisions including confidentiality, invention assignment, and license agreements with our employees, contractors, consultants, and other third parties with whom we partner, to establish and protect our brand, proprietary technology, and other IP Rights. Such contractual provisions may not be self-executing and may not otherwise adequately protect our IP Rights, particularly with respect to conflicts of ownership relating to work product generated by employees, contractors, consultants, or other third parties with whom we partner, and we cannot be certain that such contractual provisions will not be breached or that third parties will not gain access to our trade secrets or other confidential information.

Previous wording

Effective protection of our IP Rights may not be available in every jurisdiction in which we offer our services and, where such laws are available, our efforts to protect such rights may not be sufficient or effective and such rights may be found invalid or unenforceable or narrowed in scope. In particular, the laws of some foreign countries, particularly certain developing countries, do not favor the enforcement of IP Rights to the same extent as U.S. laws. This could make it difficult for us to stop the infringement, misappropriation, or other violation of our IP Rights. Any failure to adequately obtain, maintain, protect, defend, or enforce our IP Rights, or significant costs incurred in doing so, could materially harm our business, prospects, financial condition, and operating results.

Current wording

Effective protection of our IP Rights may not be available in every jurisdiction in which we offer our services and, where such laws are available, our efforts to protect such rights may not be sufficient or effective and such rights may be found invalid or unenforceable or narrowed in scope. In particular, the laws of some foreign countries, particularly certain developing countries, do not favor the enforcement of IP Rights to the same extent as U.S. laws. This could make it difficult for us to stop the infringement, misappropriation, or other violation of our IP Rights. Any failure to adequately obtain, maintain, protect, defend, or enforce our IP Rights, or significant costs incurred in doing so, could materially harm our business, financial condition, operating results, reputation, and future prospects.