Matt Oppenheimer: I think — yes, Will, it’s a great question. I think the punchline answer to the take rate question is mix shift. So, that’s within the normal band. There’s nothing that’s happening from a competitive standpoint in Q1 that changed that. And then I love your question around digital disbursement because I think that we have a strategic advantage with our digital-first approach at scale to continue to drive variable costs out of the system. And as we do that, we can decide how much we pass along to customers versus how much we pass along to improving transaction expense, but lots of room for us to continue to differentiate there. And we’re leading the way when it comes to digitization, and we’re really, really excited and proud of that and excited about what it will hold for our customers as we look forward.
Will Nance: Yes. Awesome. Makes a ton of sense. And then just maybe as a follow-up, the seasonality kind of dynamics, I think, kind of coming up every other quarter. And I hear the commentary on sort of the cadence in the back half of the year, which is, I guess, great to hear the confidence. And I guess I wanted to follow-up on the commentary that the growth rate should actually be stronger in the second half of the year on easier comps. And I guess maybe can you just expand a little bit more on that? Like I guess, when we think about seasonality, it kind of seems like in every other quarter type of thing. And so when you talk about the stronger growth rates in the back half of the year, — is that mostly a comment on the third quarter? Or are you generally expecting to see acceleration even as we lap what was a pretty stellar performance in the fourth quarter last year? Sorry to be so nitty-gritty on the quarters here.
Hemanth Munipalli: Yes, I mean I think the way that we were trying to frame up this to help people understand seasonality. Of course, there are seasonal patterns, which largely relate to sort of holidays and gift-giving periods. And we kind of see that again in Q2 with some of the holidays coming up or have come up earlier this quarter. Now, to your question on growth rates, yes. I mean I think when we look at last year, first half, second half and this year, first half, second half, we had really exceptionally strong first half of 2023. So, when we think about sort of in terms of growth rates, I think that’s kind of why we wanted to share a little bit more around how we think about Q2 as you already have the numbers for Q1, but we do think that Q3 and Q4 will have improved revenue growth rates from that context, we’re within the guidance range, again, reinforcing the 30% to 32% for the full year.
So, that’s how it sort of plays out. There is the year-over-year comparison and then there’s sort of the seasonal elements underpinning all of that. I also just want to point out that we’ve had record new customers. We continue to be excited about adding a lot of new customers. Our base has continued to grow, and we’re seeing really strong active customer growth. We talk about QAUs and the metric that we share, but we’re excited that we’re continuing to build a very strong base of customers here.
Will Nance: Got it. Appreciate you taking the questions.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Tien-Tsin Huang with JPMorgan. Please proceed.
Tien-Tsin Huang: Thanks a lot. I just want to clarify on the new marketing efforts. I know you mentioned something here in L.A. Do you think some of these investments will be more focused in the second quarter? Or is this more spread out? Do you see it spreading protect other cities or regions as well based on what you learned? Just trying to understand what’s new versus structurally change in in your approach on marketing?
Matt Oppenheimer: Yes. Thanks Tien-Tsin. I would say it’s a continuation. So, this is not something that’s dramatically new or different. It’s more rolling out what we’ve done in new geographies. So, I wouldn’t expect there to be large spikes quarter-to-quarter, and we’ve got a lot of confidence in the playbook that we’ve rolled out. So, I just mentioned the L.A. example is one, but we’ve got a lot of other performance marketing channels that are great acquisition channels, especially during times that customers send like Mother’s Day and other seasons like that. So, continuation and proven channels that we’re excited about the continued return from this.
Tien-Tsin Huang: Okay, great. And then just quickly on the — I know a lot has been asked around seasonality. Just how about — with the volatility in foreign currency, especially strong dollar here, is there anything to consider with respect to pull forward of growth? I know it would be transient, but just figured I’d ask. And also as FX volatility callout with respect to take rate fees monetization, that kind of thing?
Hemanth Munipalli: Yes. Thanks, Tien-Tsin, for the question. When we look at on a global basis, we don’t see we have an increasingly diversified portfolio of corridors, and we see FX sort of impact everywhere. And generally speaking, on a constant currency basis, as you can see, our revenue growth rate was plant. And so nothing specific to call out in terms of FX there. There’s always going to be some degree of FX sensitivity for short periods of time at certain transaction sizes, and we see that as well. But on an aggregate basis, as we look across, we haven’t seen anything that is material or significant to the results.
Tien-Tsin Huang: Good. Thank you.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Rufus Hone with BMO. Please proceed.
Rufus Hone: Hey guys. Thanks for the question. I wanted to ask about the competitive environment and really just whether you’re seeing any incremental change in competitive intensity? Any extra color there would be great. Thank you.
Matt Oppenheimer: Yes. Yes. thanks. Let me take that one. And the headwind there is, as you do, we look at the competitive dynamics, and we haven’t seen any material changes in Q1. I think that’s indicative of the fact that it’s a very large market, as we’ve mentioned, we’re 2% of that very large market. And we’re outperforming that market. If you look at the scale and size and growth rate combined of the $1 billion in trailing 12-month revenue and 32% year-on-year growth. And when you look at why that’s the case, the — we tend to be more customer than competitor-led. And when you look at the product that we have built and that continues to get better every day in terms of reliability, in terms of speed, in terms of a lot of those descriptors that we called out that our customers use to describe our products.
That results in strong retention in an industry-leading product, and we’re excited about continuing to have the kind of growth that I mentioned as we look forward. So, no changes to note in the competitive dynamics other than the structural benefit that we believe we have as a digital-first player at scale and how that resonates in our product.
Rufus Hone: Okay. And just a quick kind of unrelated follow-up on Remitly Circle. I was wondering whether there was any sort of update on progress there? Thank you.
Matt Oppenheimer: Yes, sure. We continue to be really excited about the ability to offer broad financial services for our customers. And as I mentioned during last earnings call, we’re investing in what we call our technology platform, and that has paid dividends when it comes to the efficiency and velocity of our engineering team in terms of taking what’s more of a monolith to a more decoupled platform that we’re using to not only deploy code and deliver faster for our remittance customers, but also we’re making very targeted investments that are more efficient to make those investments on top of that technology platform in what we call complementary products and services. And so Circle is one of those. And given our scale and size of the business and just our approach in general, we like to have products get to more materiality before we talk about them broadly, but excited about what’s to come with Circle and another area that we’re investing in when it comes to [Indiscernible] products.
More to come there in the future, but excited as ever about the opportunity.
Rufus Hone: Thank you.
Operator: Thank you so much. One moment for our next question, please. And it’s from the line of Cris Kennedy with William Blair. Please proceed.
Cris Kennedy: Good afternoon. Thanks for taking the question. Matt, you talked about the structural profitability of the business. Can you give us your updated views on the long-term margin opportunity here?
Matt Oppenheimer: Yes, I think I can — why don’t I let Hemanth — and then I’m happy to jump in.
Hemanth Munipalli: Yes, awesome Yes. Thanks for the question, Cris. Yes. I think when you think about, first of all, maybe stepping back in here, I mean, we — I think we reiterated that we have a significant growth opportunity in cross-border and remittances, and we’re excited about that. So, we really anchor around the growth trajectory, and we expect to be in sort of having that as being the primary focus of all of our investments that we’re making. But as we look across the P&L, as you’ve seen, we’ve been delivering improvements in transaction expense reduction. And frankly, also really excited about the work that’s been done in reducing our customer service expenses, which has been reducing year-over-year basis quite substantially with both processes as well as bringing some of the AI and other technologies into it.
We’ve renewed — or I say have even more focus on operational efficiencies, and you’ve seen that now with our EBITDA performance in the quarter and our increase in our confidence for rest of the year in terms of increasing our EBITDA. So, we are making progress on improving our margin, to your question, but I think it’s a little bit too early for us to talk about long-term margin profile. The business fundamentally has very strong unit economics and we’ve seen that to continue to play out. We’ve seen strong retention and those aspects of customer behavior. So, we want to make sure we’re taking a balanced approach. But keeping in mind there is a cost of the capital and delivering the returns, both for the near, mid, and long-term. So, early to talk about long-term margins, but making good progress on that front.
Matt Oppenheimer: Yes. And Cris the only thing that I would add on that front is remittance businesses, our payments business is inherently, and payments business is at scale are — get a lot of leverage and cash flow when done effectively and correctly, especially digital payments companies. And I think you’re seeing that if you look back, I mean, even a year ago, it’s easy to lose — I mean we had just over $5 million in adjusted EBITDA a year ago. We’re $19 million in the first quarter of this year, and we’ve guided to $85 million to $95 million in adjusted EBITDA for the year. So, that kind of ramp gives you a sense of how the business is getting leveraged. Now, we’re still growing at 32% year-on-year, while getting that leverage because we want to balance growth and profitability.
But we’re — I will tell you, having again run this business for the last 10-plus years. Five, 10 years ago is really hard to start getting leverage out of the business because we just weren’t quite large enough. Now, we really have the dials around how much we want to drive down to the bottom-line versus how much we want to grow and we’re excited about the momentum on both the top and the bottom-line and what’s to come.
Cris Kennedy: Great. Thank you for that. And then just you mentioned April, can you give any more color on kind of the trends that you saw in that month? Thanks for taking the question.
Matt Oppenheimer: Yes, I’m happy to take that one, Cris. I think that it’s a really important and good question because I think that we’ve been pleased with the activity — customer activity in April as we’ve seen, given the seasonality points that we’ve made. And obviously, we look at monthly active rates in addition to quarterly active rates. And so as we look at our QAU goals for Q2, we’re feeling good about those. And it reinforces that there’s seasonality to the business and customer retention continues to be strong. The customer acquisition continues to be strong, which gives us confidence in the rest of the year, as we mentioned. And the one other thing I’ll make on this because I think it is related is we don’t internally use the term net adds.
We do obviously look at quarterly active users, but net adds somehow would signal that these are like new customers coming into the business. And different customers are active in different quarters, hence the seasonality. And when you look at the activity rate in April, it further reinforces that we’re excited about our continued retention and the great product that we’re continuing to deliver for our customers.
Cris Kennedy: Thank you.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Darrin Peller with Wolfe Research. Please proceed.
Darrin Peller: Hey guys. Can we just circle back to the digital dispersed transaction trends in terms of the amount of the volume per transaction and the trend line it’s been dropping a bit for a little some time now. I just kind of want to understand some of the dynamics there and what you see in terms of stabilization — or maybe when you could see stabilization on that front? And maybe a little more on the dynamics driving that?
Matt Oppenheimer: Yes. Sure, Darrin. Yes, great question. I think that we do see in some markets an increase in digital disbursement trends, which we view as a real positive for our business. And it might mean that customers transact more frequently but a lower average transaction amount, given how easy it is and the variable cost and effort of sending to a mobile wallet as opposed to cash pickup, both take that cost out of the system and makes it easier for customers. And so we feel very well-positioned to lead some of those transitions in some markets. But I can’t emphasize enough that it really varies depending on the market. We’re in 170 countries. Some markets remain predominantly cash pickup, some markets are mobile wallet, some markets are bank deposit.
A few markets are even home delivery, where a courier will come deliver cash to one’s home. And what we’re good at is getting customers the funds the way that they want to receive them looking very intentionally at the variable costs that feed into that lifetime value and then offering a great product to customers that meet their needs. And given our scale and size, we also have more and more leverage to drive down those costs and do more direct integrations to make that experience more affordable and much faster and more seamless. So, we see these trends as positive for our business, and they do very tough depending on the country that customers are sending money to.
