Remitly ::Update:: ADD

Despite a revenue beat, the market is hammering the stock (NAS:RELY). Oftentimes, management can present earnings and be in shock when they gaze back at the price action on their screens and this is one of those times. The stock is down ~35% on the day. Growth traders, momentum buyers, and Johnny-come-latelys are washing out. We believe this is a great opportunity to buy an incredibly attractive business after an unjustifiable sell-off. We added a significant amount at around $20 a share and the position is now close to 6% of our portfolio.

Earnings Update:

Revenue totaled $241.6 million, compared to $169.3 million, up 43%. y/y (slight beat on estimates)

Net loss was $35.7 million, compared to a net loss of $33.1 million. y/y (slight miss on estimates, mostly non-cash SBC)

Adjusted EBITDA was $10.5 million, compared to $(3.7) million. y/y

They continue to execute and grow according to our Thesis.

Our thoughts after the earnings call:

Management made it clear that they are focused on increased growth expenditures when the market wants them to pare back growth expenditures to focus on profitability.

Remitly cash burn is ~breakeven and they have ample liquidity (over 400mm) and no debt. They are internally funding growth. Shifting gears to focus on profitability now would be a self-inflicted mistake given they are in the ~second inning of an enormous and scalable market opportunity. This management is no stranger to market selloffs and is not in danger of letting the market dictate its strategy.

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