What happened
Shares of Remitly Global (RELY -0.89%) were surging today after the fintech company that's focused on cross-border remittances posted strong results in its fourth-quarter earnings report, beating estimates on the top and bottom lines.
As a result, the stock was up 17.8% as of 10:57 a.m. ET.
So what
Remitly, which helps millions of immigrants send money back to their home countries, said active customers rose 48% to 4.2 million, driving send volume up 35% to $8.1 billion and revenue up 41% to $191 million, which topped estimates at $180.8 million.
The strong growth shows that the company fills a need that is largely unaffected by global macroeconomic headwinds, as it provides vital services for its customers, who need a secure way to send money back to their families in their home countries.
On the bottom line, the company flipped from an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $7.1 million to a profit of $7.5 million, showing the business is gaining traction. Its generally accepted accounting principles (GAAP) loss per share widened from $0.10 to $0.11, but that beat estimates at a per-share loss of $0.14.
CEO Matt Oppenheimer said: "Remitly's consistent outperformance in 2022 is a testament to the unique value we offer customers and the demonstrated effectiveness of our focus on delivering efficient growth. In 2023, our increasing scale, customer loyalty, and superior technology will allow us to drive greater efficiencies, while we also invest in our strategic priorities to drive sustainable returns."
Now what
Looking ahead to 2023, Remitly offered strong guidance, calling for revenue growth of 32% to 35% to $860 million to $880 million, which was better than the analyst consensus at $848.5 million.
On the bottom line, it expects an adjusted EBITDA profit between breakeven and $10 million, an improvement from the $13.6 million EBITDA loss it had in 2022.
Remitly IPOed in 2021, and the stock fell sharply along with the broader sell-off in growth stocks. However, it fills a unique need in the fintech market, and now that it's posting EBITDA profits and maintaining solid revenue growth, it deserves a closer look, as it could have substantial upside from here.
