Wall Street is fixated on "net adds." Every earnings call, the question comes up: How many new users did you snag? It's a metric that makes sense on the surface - growth means more customers, more revenue, more happy shareholders, right? But when it comes to Remitly, the obsession with net adds is blinding analysts to a far more powerful trend: **the resilience of their existing customer base and its impact on their long-term profitability.**

Hidden within Remitly's latest transcript lies a bombshell revelation: **customer retention, as measured by revenue less transaction expense, sits at a staggering 95% year-over-year after the first full year.** This means that the customers Remitly acquires aren't just fleeting additions, they're highly loyal, repeat users generating predictable and durable revenue for years to come. This isn't a company chasing fickle trends; it's building a fortress of recurring revenue streams.

The key to understanding this remarkable stickiness lies in the nature of Remitly's core service: international remittances. These aren't impulse buys or discretionary spending; they represent a lifeline for millions of immigrants sending money back home to support families and loved ones. It's about putting food on the table, paying for education, and covering essential medical expenses. This deep-seated need translates into highly consistent customer behavior – a behavior that Remitly has astutely recognized and leveraged to its advantage.

While analysts fret over quarterly fluctuations in net adds, Remitly focuses on optimizing **Lifetime Value (LTV)**. They're not playing a short-term game; they're building for the long haul, investing in a customer relationship that extends far beyond a single transaction. This approach is particularly potent given Remitly's strategic shift towards digital disbursement.

As digital transactions, primarily to mobile wallets, become increasingly popular, transaction sizes might shrink, but the frequency of transactions skyrockets. This creates a powerful double whammy: not only does Remitly benefit from lower transaction costs associated with digital payments, but they also enjoy a surge in transaction intensity (transactions per active user), further bolstering LTV.

"The transcript reveals a compelling trend: a **500 basis point year-over-year increase in digital transactions.** This isn't just happenstance; it's a strategic move on Remitly's part, leveraging their digital-first approach to capture a rapidly evolving market. They're not simply reacting to the shift; they're driving it, and the results speak for themselves."

This digital dominance gives Remitly a significant competitive edge. Subscale competitors, reliant on costly legacy payment networks, simply can't match the speed, reliability, and affordability of Remitly's direct integrations with major banks and telcos like M-Pesa, Alipay, and BDO. This translates into a superior customer experience, further solidifying Remitly's position as the go-to platform for trusted international remittances.

The transcript's emphasis on operational efficiency underscores the strength of this underlying business model. Remitly is laser-focused on streamlining processes, deploying AI-powered solutions, and automating customer support to drive down costs. This relentless pursuit of efficiency has already yielded impressive results: a **260 basis point year-over-year reduction in customer support costs** is a testament to their success.

This newfound efficiency provides Remitly with remarkable flexibility. They can continue to aggressively invest in high-return marketing initiatives to capture new customers, confident that these investments will yield predictable and durable revenue streams for years to come. **In 2024, Remitly plans to acquire even more customers than in 2023, a bold move that underscores their confidence in the strength of their LTV and the vastness of their market opportunity.**

Key Performance Indicators

Projected Revenue Less Transaction Expense

The following chart is a hypothetical representation of Remitly's projected revenue less transaction expense, based on a 95% customer retention rate, a 5% annual growth in revenue less transaction expense per customer, and the addition of 2 million new customers in 2024.

While Wall Street remains fixated on the "net adds" mirage, Remitly is quietly building an empire of recurring revenue, driven by the unwavering loyalty of its customer base. They're not just a high-growth fintech darling; they're a company with a fundamentally strong business model, poised to deliver sustainable profitability for the long term.

"Fun Fact: The World Bank estimates that global remittances reached a record $794 billion in 2023, highlighting the immense scale and importance of this market for millions of families worldwide."