Teleconferência de Resultados do 3T 2026 da Remitly (RELY): Receita Sobe 22%, Margem EBITDA Atinge Recorde

A Remitly Global, Inc. (NASDAQ: RELY) reportou receita e EBITDA ajustado recordes no terceiro trimestre de 2026, impulsionados pelo aumento no volume de envios, pela expansão da margem de transação e pela alavancagem operacional. A administração também apresentou planos de crescimento em remessas para pessoas físicas, pagamentos corporativos e no Remitly Global Card.

Principais destaques

• A receita do 3T aumentou 22% em relação ao mesmo período do ano anterior, para US$ 510 milhões, enquanto o volume de envios subiu 25%, atingindo US$ 24,4 bilhões.
• O EBITDA ajustado atingiu o recorde de US$ 121 milhões, com margem recorde de 24%. O lucro líquido cresceu mais de sete vezes, para US$ 67,6 milhões, ou US$ 0,30 por ação diluída.
• A margem de transação em dólares cresceu 27%, para US$ 347 milhões. A margem de transação expandiu 312 pontos-base, atingindo 68%, refletindo perdas menores com transações, melhores condições com parceiros e a escala da rede.
• O número de clientes ativos no trimestre aumentou 17%, para 10,3 milhões. O volume de envios por cliente ativo subiu 7%, para o recorde de mais de US$ 2.350, sustentado por transferências de maior valor, usuários corporativos e mais transações por cliente.
• A administração elevou suas projeções para o ano fechado para uma receita entre US$ 1,989 bilhão e US$ 1,991 bilhão e EBITDA ajustado de US$ 441 milhões a US$ 443 milhões.
• Para 2027, a administração espera atualmente um crescimento de receita próximo ao piso da faixa de 15% a 19% e uma margem de EBITDA ajustado amplamente alinhada às projeções de 2026, refletindo a normalização dos investimentos e uma base de comparação mais difícil relacionada à implementação inicial da taxa de 1% sobre remessas.

Principais resultados financeiros

As despesas com transações somaram US$ 162 milhões, ou 32% da receita. A provisão para perdas com transações foi de US$ 21,3 milhões, equivalente a 8,7 pontos-base do volume de envios.

Foi registrada alavancagem operacional em todas as categorias de despesas. As despesas de marketing representaram 19,7% da receita; suporte ao cliente e operações, 5,3%; tecnologia e desenvolvimento, 11%; e despesas gerais e administrativas, 8,4%.

Desempenho operacional e dos negócios

As remessas para pessoas físicas continuaram sendo o principal motor de crescimento da Remitly. Quase 84% das transferências foram concluídas em menos de um minuto, uma melhora de mais de 50 pontos-base em relação ao trimestre anterior. A companhia também lançou o envio de recursos a partir do Brasil e incluiu novas opções de recebimento que expandiram seu alcance para mais 11 milhões de contas.

As grandes transferências continuaram sendo uma área prioritária. O volume total de grandes transferências cresceu 25% na comparação anual no 3T, enquanto o volume fora da Índia aumentou 80%. A administração informou que as operações na Índia foram afetadas pelas medidas temporárias de mobilização de moeda estrangeira do Reserve Bank of India, encerradas em agosto. Nos últimos 12 meses, o volume total de grandes transferências cresceu mais de 50%.

A Remitly Business encerrou o trimestre com mais de 30.000 usuários em 26 países. O tempo de integração (onboarding) melhorou 38% nos últimos dois trimestres, enquanto os novos recursos incluíram o Send by Link, Bulk Send e integração com o QuickBooks Online. A administração planeja expandir para processamento de folha de pagamento em 2027 e acredita que os pagamentos corporativos poderão, eventualmente, gerar uma receita comparável à de remessas para pessoas físicas.

O Remitly Global Card passou a estar amplamente disponível nos EUA. Os clientes agora podem enviar e solicitar pagamentos domésticos de outros usuários do Global Card, expandindo a atuação da Remitly para além das transferências internacionais. A administração espera que o negócio de cartões ganhe tração ao longo de 2027 e comece a dar uma contribuição relevante a partir de 2028.

Geograficamente, a receita nos EUA cresceu 25% e a receita no Resto do Mundo aumentou 23%. A receita nos Emirados Árabes Unidos subiu mais de 150%, impulsionada pela ampliação de licenças e pela forte atividade em grandes transferências.

A administração declarou que os novos negócios estão a caminho de representar cerca de 5% da receita em 2026 e mais de 10% até 2028. Essas linhas de negócio incluem pagamentos corporativos, grandes transferências, produtos para recebedores e o Global Card.

A IA contribuiu para perdas menores com transações e maior eficiência em engenharia, detecção de fraudes e suporte ao cliente. O agente virtual da Remitly reduziu o tempo médio de atendimento em 22%, enquanto a gestão ativa dos modelos de IA diminuiu os custos com tokens em 55% no 3T.

Guidance da administração

Para o 4T, a administração espera que o crescimento no volume de envios supere o avanço da receita, enquanto o crescimento da receita deve superar a expansão da base de clientes ativos. O volume de envios por cliente ativo deve crescer a uma taxa de um dígito médio a alto.

A margem de transação no 4T deve se moderar na comparação anual devido a uma base de comparação difícil para perdas com transações. As despesas de marketing por cliente ativo devem subir de forma modesta à medida que a Remitly investe em aquisição de clientes e campanhas de marca.

A administração reiterou a meta de atingir um resultado acima da Regra dos 40 (Rule of 40-plus) até 2028, definida como a soma da taxa de crescimento anual composta da receita entre 2025 e 2028 e da margem EBITDA ajustado de 2028.

Riscos e pontos de atenção

• A administração afirmou que a volatilidade cambial, os acontecimentos geopolíticos e as condições macroeconômicas continuam difíceis de prever.
• O panorama preliminar para 2027 incorpora uma base de comparação mais difícil com a superação do efeito da implementação inicial da taxa de 1% sobre remessas.
• As perdas com transações podem oscilar a cada trimestre. A modelagem atual da administração para 2027 adota um intervalo de 9 a 13 pontos-base, com premissa média de 11 pontos-base.
• As medidas temporárias de moeda estrangeira do Reserve Bank of India afetaram as grandes transferências para a Índia e podem provocar uma antecipação de volume (efeito pull-forward).
• A precificação de remessas continua competitiva. A administração enfatizou que a manutenção das margens depende de escala, baixo custo de atendimento e precificação de transações em tempo real.
• A Remitly espera um patamar de investimentos mais normalizado em 2027, após despesas abaixo do esperado em 2026 decorrentes da reavaliação de iniciativas de negócios.

Destaques da sessão de perguntas e respostas com analistas

Os analistas concentraram suas perguntas no crescimento de clientes ativos, nos investimentos para 2027, na pressão sobre grandes transferências relacionadas à Índia e na diferença entre o ritmo de crescimento do volume de envios e o de clientes.

A administração atribuiu a diferença entre o avanço de 25% no volume de envios e de 17% em clientes ativos a um volume de maior qualidade, incluindo mais usuários corporativos, transferências maiores e mais transações por cliente. As adições de novos clientes aumentaram na comparação anual, enquanto a retenção líquida em dólares atingiu patamar recorde.

Quanto à rentabilidade em 2027, a administração informou que os investimentos aumentarão em produtos, marketing e operações, mas que a IA deve continuar elevando a produtividade e a eficiência. Destacou ainda que equipes enxutas focadas em IA (AI-first) estão lançando produtos com mais rapidez sem aumento proporcional no quadro de funcionários ou nas despesas.

Em relação à Índia, a administração não quantificou o impacto exato das medidas do Reserve Bank of India. No entanto, descreveu o efeito como expressivo e destacou que o volume de grandes transferências fora da Índia cresceu 80% no trimestre.

A administração também afirmou que suas projeções melhoraram com o maior uso de IA e aprendizado de máquina, safras de clientes historicamente mais estáveis e a maturação crescente dos novos negócios. Ainda assim, qualificou o panorama para 2027 como preliminar e disse que os resultados do 4T ajudarão a calibrar o guidance formal.

Transcrição completa da teleconferência de resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Good day, and thank you for standing by. Welcome to the Remitly Third Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded.

I would now like to hand it over to your first speaker, David Beckel, Head of Investor Relations. Please go ahead.

David Beckel

Good afternoon, and thank you for joining us for Remitly's Third Quarter 2026 Earnings Call. Joining me on the call today are Sebastian Gunningham, Chief Executive Officer of Remitly; and Vikas Mehta, Chief Financial Officer. Results and additional management commentary are available in the earnings release and presentation slides, which can be found at ir.remitly.com. Please note that this call will be simultaneously webcast on the Investor Relations website.

Before we start, I would like to remind you that we will be making forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding Remitly's future financial results and management's expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You should not place undue reliance on any forward-looking statements. Please refer to the earnings release and SEC filings for more information regarding the risk factors that may affect results. Any forward-looking statements made in this conference call, including responses to your questions, are based on expectations as of today, and Remitly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law.

The following presentation contains non-GAAP financial measures. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures, please see the earnings press release and the appendix to the earnings presentation, which are available on the IR section of the website.

Now I will turn the call over to Sebastian to begin.

Sebastian Gunningham

Thank you, Dave. Thank you for joining our third quarter earnings call. We reported revenue of $510 million, up 22%. Net income was $68 million, a sevenfold increase. Q3 was another record quarter for Remitly with customers send volume and revenue reaching all-time highs. These results reflect the trust our customers place in us to move money safely, fast and at the right value. They also reflect the growing scale of one of the world's largest cross-border networks.

Just as important and less visible in the numbers is our momentum in product development. This quarter, our team shipped more than twice as many updates and new features as last year and 30% more than last quarter. That speed powers our flywheel. New products attract new customers, more customers drive more volume, more volume lowers our cost. That gives us more capacity to invest in new products and the flywheel spins faster. It's also how we're evolving from a remittance company into a global financial services provider for people and businesses whose money crosses borders.

I'll start with an update on our 3 growth areas: consumer remittances, business payments and cards. First, consumer remittances. Our consumer business ranges from everyday senders who send less than $300 per transfer on average to customers sending up to $300,000 in a single transaction. All of them rely on the breadth, speed and reliability of our network. This quarter, that network got bigger and faster. We launched sending from Brazil. It's our first country where customers can both send and receive in the Remitly app. We added thousands of customers in the first few weeks with no paid marketing. Seven new payout options from Angola to Ecuador extended our reach to 11 million more accounts.

On speed, nearly 84% of our transfers now arrive in under a minute, up more than 50 basis points from last quarter. And U.S. real-time rails have cut U.S. bank deposit times from hours to seconds.

Large transfers are a new focus for us. Large transfer volume has grown more than 50% over the last 12 months as we remove friction and raise send limits. This month, we launched FX protection and guaranteed instant bank transfers for customers who regularly send more than 5,000 at a time. It gives them what they value most, rate certainty and speed. More benefits are coming, and we're bullish on this category. We've also broadened how we define our consumer remittance opportunity. It now includes recipients, not just senders. Recipients are a large untapped opportunity to build and monetize a 2-sided network. Each sender sends money to 2 or 3 recipients on average. Early data suggests engaged recipients go on to bring in new senders. So growth on one side can fuel growth on the other.

Now growth can start from the receiver side, too. Anyone in the world can now request money through the Remitly app and every request can bring a new sender into the network. Send with text works the same way. It makes sending and receiving money as easy as sending a text.

In the past year, our network connected more than 50 million senders and recipients in more than 175 countries and over 100 currencies. It's a core differentiator for Remitly. We know our senders deeply. New features like requesting money and send with text, let us start building direct relationships with recipients, too. We'll keep launching products that lift the financial lives of people on both ends and strengthen our flywheel.

Our second growth area is business payments, a more than $40 trillion opportunity. It brings in businesses and freelancers as a new customer base. Our business offering has 2 parts. The first is our Remitly branded product, where businesses send and receive money directly through Remitly. We're now in 26 countries with more than 30,000 business users and growing. It's a large underserved category, and it runs on the same network as our consumer business. Every business we add increases our scale and lowers our cost per dollar set.

The second is a platform offering. Any company can plug into our network through our APIs to move money globally. Last quarter, Etsy signed as our first platform partner, which will allow Etsy sellers in 15 countries to get paid through Remitly. It's the first of many partnerships and each one adds volume to our network. And we're just getting started. Many of the businesses that send money with us increasingly want to run more of their finances with us. That includes domestic payments, holding balances and paying international teams and contractors. In 2027, we plan to expand into payroll as we work towards becoming the main account for these businesses. Over time, we believe business payments could be as large a revenue source as consumer remittances.

Our third growth area is our new cards business. Last quarter, we launched the Remitly Global Card. It's a powerful all-in-one card that brings everything across-border life needs into one place. Cardholders get our best remittance prices to more than 175 countries, plus everyday spending and a full set of features that makes moving money easier. Our membership plan adds access to credit, so members can send money home before payday. This quarter, we added SmartRate and eSIM to membership benefits with more to come. Adoption is growing quickly. We're encouraged by early engagement and the lift we're seeing in remittance volume. We believe the Global Card belongs in the hands of all of our more than 50 million senders and recipients, and we're confident it will become a meaningful stand-alone revenue driver.

One network, 3 growing revenue streams. Our business has never been stronger. After almost 9 months as CEO, listening closely to investors in the industry, I've heard 4 main questions about the durability of our growth. I want to address each one directly, pricing, stablecoins, neobanks and our reliance on consumer remittances. First, pricing. Some investors worry about the long-term remittance pricing. Price is one of many levers we and others can pull to win customers, and customers often reward the lowest price.

Protecting margin in that environment takes 2 things. The first is the lowest cost to serve. Our scale and continuous cost improvements give us an advantage there. The second is the right price for the right customer at the right time. Over the past year, we built a proprietary pricing engine that uses advanced data, AI and machine learning to price every transaction in real-time. Together, they've helped grow transaction margin dollars by $75 million over the past year or 27%. Our competitive landscape rewards the scale player with the best cost structure. Quarter after quarter, we've shown we can compete on price and still expand our margins, and that advantage widens with every dollar we move.

Next, stablecoins. Some believe stablecoins will let anyone move dollars instantly and almost for free, making remittance providers unnecessary. We see it differently. A dollar stablecoin is a digital dollar. A blockchain is simply a new rail it moves on. We own the customer relationship and stablecoins becomes one more way our network moves money. Most importantly, we deliver the last mile. We get money to people where and how they need it. Stablecoins solve the middle of the journey, moving value quickly between treasuries. They don't solve the hard parts. Someone still has to take in local currency and run KYC and sanction checks. Someone has to stay licensed in every country and convert to pesos, rupees or naira. And someone has to deliver to a bank account, wallet or cash pickup point in a small town. That work is our network, and it's what makes us hard to copy.

A blockchain alone doesn't put cash in the hands of a family in rural Mexico or India. So we use stablecoins to strengthen an already diverse network. They give us more ways to move money faster and at a lower cost. We're a founding member of Open USD consortium. We use USDC and treasury to settle prefunding faster. And we've launched a stablecoin wallet and card for recipients in select Latin American countries.

We choose the fastest, lowest cost compliant path for every transfer. Any technology that lowers cost helps the scaled operator with the best cost structure most. Stablecoins are only about 1% of consumer cross-border payments today. This is an opportunity we're building on early, not a threat we're reacting to.

Next, neobanks. Some fintechs and neobanks are offering 0 fee transfers to win customers. But many of these free offers are only worked between the neobanks own accounts. They often come with limits or an FX spread attached. Our customers send to families who bank wherever they bank use a local wallet or pick up cash. Remitly reaches more than 5 billion potential recipients through banks, mobile wallets and nearly $500,000 cash pickup options, often in seconds. A bank present in 1 or 2 countries can't offer that. Banks and payments apps generally stop at the border. We start there.

Step back and you'll see neobanks and fintechs converging on the same products, accounts, cards, lending, investing, multicurrency balances and money transfers. What differs is where each of us started. Cross-border money movement is arguably the hardest to build. It means mastering the complexity of licensing, compliance, fraud prevention and payout in every country. We spent a decade building it. Very few companies can move money to billions of people in more than 175 countries in seconds with one tap. We built that network first. Now we're putting everything else our customers need on top of it, and each new offering comes faster.

This morning, we launched a new product that proves the point. For the first time, Remitly moves money within a country, not just across borders. Remitly Global Card customers in the U.S. can now send and request money from each other anywhere in the country. Paying your roommate down the street and sending money to family in Manila now happen in the same place. Think of it as a Venmo without borders, one app to pay people in the U.S. and in more than 175 countries. This is more than a new feature. It says a lot about where we're headed. Domestic payments happen more often than international transfers. So Remitly now becomes part of our customers' everyday financial lives, and it took a small team just a few weeks to build. That's what makes the global card so powerful. Remittances are our foundation and the Global Card is how we build on it. It brings the account to our customers. It offers card-to-card transfers wherever they are on a global network, few closed-loop players can match.

As we compete with neobanks for customers' everyday financial lives, we have 3 advantages: a head start on the hardest product, a licensed payout network in more than 175 countries and more than 50 million senders and recipients to offer it to. Our goal is for every Remitly customer on both sides of the transfer to hold a Global Card.

Our network took years to build, and there are no shortcuts, and the results speak for themselves. Active customers grew 17% year-over-year during the same period, many neobanks launched free offers in some of our largest geographies. We compete on a durable economics, not a subsidy with an end date.

Finally, our reliance on consumer remittances. Some see Remitly as a highly successful single product company, but they see it as one that's exposed to price pressure and shifts in global migration. Consumer remittances is our engine. It's growing 20%, more than twice the industry rate. And we have plenty of room to keep growing in a market worth more than $2 trillion a year. And it is no longer our only engine. Our future rests on 3 connected revenue streams running on one network, consumer remittances, business payments and the Remitly Global Card. Each one is a large opportunity in its own right. The same licenses, partners, treasury and risk models that serve a $300 transfer serve a $300,000 one.

Once you can move $1 across the border, moving $1 million is simple. That's why we believe business payments could one day be as large as our consumer business and the Global Card turns more than 50 million senders and recipients into potential cardholders, giving us a new way to serve them every day, not just when they send money home.

Each new revenue stream run on a network we've already scaled and optimized. So it adds low-risk, high-margin revenue. It also spreads our exposure across more customers and more send countries. We expect our new businesses to grow from about 5% of revenue this year to more than 10% in 2028.

These are the right questions to ask about any business, and I wanted to address them directly. In answering them, I've also laid out our strategy. We want to become an increasingly essential financial services provider for people whose lives cross borders. I conviction that all 4 questions come down to one, who owns the trusted global money movement network and how valuable is it? Owning it means being accountable for everything it takes to move money safely at scale. That means knowing the customer, maintaining hundreds of licenses and monitoring millions of transactions a week. Remitly owns one of the largest licensed money movement networks in the world. It's taken more than a decade to build, features may be easy to copy a network like ours is not. That network is our foundation. We're now building a global financial services company on top of it, the account, the card and business payments, all on rails we already own. Every product we add makes the network more valuable, and the network makes every new product faster and cheaper to launch.

Let me close with this. I can't look back on this quarter or ahead at our strategy without recognizing the exceptional team behind it. Our people are relentlessly focused on our mission. They give customers the trust, reliability and speed they can't get anywhere else. Together, our network and our team are our durable competitive advantage. Every transfer makes that advantage stronger. The results show it. Revenue has grown at a 35% compounded annual rate over the last 5 years. To everyone at Remitly, thank you for what you've built and for what you're building next.

Vikas will walk you through our early outlook for next year. It reflects an environment that's hard to predict this far out. But our confidence doesn't depend on the environment. It depends on what we built, a battle-tested network, a team that executes quarter after quarter and customer trust earned one transfer at a time. None of it can be copied or rushed. We'll keep winning share in remittances. We'll keep diversifying our revenue, and we'll keep building the financial home for a cross-border world.

I'll now hand the call over to Vikas.

Vikas Mehta

Thank you, Sebastian, and good afternoon, everyone. We delivered another excellent quarter of profitable growth and strong free cash flow with revenue growth and adjusted EBITDA margin together exceeding the Rule of 45, reflecting solid execution and a rigorous attention to cost discipline. Third quarter revenue was $510 million, $4 million above the midpoint of our guidance and up 22% year-over-year. Adjusted EBITDA was $121 million, $28 million above the midpoint of our guidance at a 24% margin, our highest ever.

Let me share an overview of our third quarter results and then provide our outlook for the fourth quarter of 2026 and our updated guidance for the full year. As we have done in the past, we will also provide an early perspective on 2027. Top line growth accelerated sequentially this quarter, driven by continued strength in core send and the scaling of our growth businesses. Our performance relative to our guidance reflects the continued benefits of regulatory changes in the United States, supporting a shift towards digital remittances and momentum at Remitly business.

Unpacking revenue drivers for Q3, send volume grew 25% to $24.4 billion. Send volume per active customer reached a record of more than $2,350, up 7% year-over-year, driven by higher average transaction sizes, which reflects a higher mix of business and large transfers and an increase in transactions per active customer. Quarterly active customers grew 17% year-over-year to 10.3 million. Quarterly active customer growth remained strong, supported by share gains across geos, especially in the U.S. to Latin America corridors. Our take rate this quarter was 2.09%.

Now let me dive deeper into our revenue performance from a geographic and new product perspective. From a send perspective, U.S. revenue grew 25%, reflecting continued share gains in key geographies. Rest of the World revenue grew 23% year-over-year, accelerating from prior quarter's pace. We continue to see robust activity in the UAE, where revenue grew over 150% year-over-year and are excited about the opportunities afforded by our expanded licenses there.

On the received side, revenue from transactions to regions outside of India, the Philippines and Mexico once again grew faster than overall revenue growth and comprised over half of our revenue mix.

Now moving on to our newer businesses. We continue to gain traction and scale, and our growth accelerators are on a track to comprise around 5% of total revenue in 2026 and exceed 10% of total revenue by 2028. I'll start by highlighting the strong performance of Remitly business this quarter, which once again saw an acceleration in volume growth. We ended the quarter with more than 30,000 Remitly business users, a little over a year in Remitly businesses gaining momentum through continuous improvement of the user experience and a growing diversified customer base. Over the last 2 quarters, time to onboard has improved 38%, and we launched multiple product enhancements, including Send by Link, Bulk Send and QuickBooks Online integration.

Next, let me share an update on large transfers, who we previously referred to as high-value centers. Large transfer volumes grew 25% year-over-year. As we shared last quarter, large transfer volumes were affected by Reserve Bank of India's foreign currency mobilization measures, which began in Q2 and concluded in August. Large transfer volumes outside of India grew 80% year-over-year in Q3, an acceleration from Q2's pace. We are seeing particularly strong growth to the UAE, where we completed multiple 100,000-plus transfers this quarter.

Shifting to receivers. Our suite of receiver products has the ability to unlock a direct relationship with tens of millions of recipients. Products like Send with Text and Paytech let us begin building those relationships and the global receiver card, which is now available in 4 countries, provides a new means of monetizing payment flows after a transaction is sent.

Finally, Remitly Global Card, which allows card members to send, spend, save and get paid from the same account. The Remitly Global Card has been available for a little over 1 quarter. And this week, we are expanding general availability to customers across the U.S. Global Card customers can also send and request money from one another anywhere in the country. This is a significant milestone for Remitly as we move beyond international transfers to serving our customers' everyday financial needs. We remain excited about the traction we see with our newer businesses and the opportunities for these offerings ahead.

Moving on to our expenses. We delivered leverage across every single expense category this quarter. These results are the product of a deliberate focus on cost discipline and the widespread use of AI internally, which has driven significant improvements in operating efficiency, particularly in fraud detection, engineering and our support functions.

Turning to our focus of driving profitable growth on Slide 12. Transaction margin dollars grew 27% to $347 million, again outpacing revenue growth with transaction margins reaching 68%, up 312 basis points year-over-year. The expansion in transaction margins reflects strong customer activity, lower transaction losses, improved partner economics and the scale benefits of our network. Transaction expenses this quarter were $162 million and as a percentage of revenue was 32%. Excluding provision for transaction losses, other transaction expenses were $141 million, improving 134 basis points year-over-year as a percentage of revenue. This improvement reflects higher efficiencies across our network as well as a continued shift in mix towards digital receive volumes. Provision for transaction losses was $21.3 million or 8.7 basis points as a percentage of spend volume. We continue to make investments in our data ecosystem and AI/ML models, which are yielding benefits. As our network grows, so does our data graph, giving us more intelligence to improve our fraud prevention.

With that, let me walk you through the specific non-GAAP expense categories. Marketing investments remain disciplined and growth focused. Marketing grew 14.6% year-over-year and was 19.7% as a percentage of revenue, a 119 basis point reduction from prior year levels. Marketing spend per active customer was $9.69, down 1.9% year-over-year, reflecting contribution from unpaid and organic channels. This month, we are launching a new global partnership with Indian cricketer, Jasprit Bumrah, widely regarded as one of the greatest bowlers of all-time ahead of Diwali, one of India's largest holidays. Our LTV to CAC ratio was above 6x, while our payback period remained under 12 months. Lifetime value of new cohorts continued to expand, growing 9% year-over-year.

Customer support and operations expense was $27.3 million and as a percentage of revenue was 5.3%, improving 83 basis points year-over-year and continuing a multiyear trend of steady operating leverage. Our virtual agent Remy reduced average handling times by 22% since launch. Technology and development expense was $56.3 million and as a percentage of revenue was 11%, improving 216 basis points year-over-year. AI-related benefits allow us to ship more and faster with the same headcount. Even as AI usage increases, we were able to reduce all token costs 55% in Q3 by actively managing usage across models.

G&A expense was $42.8 million, flat year-over-year. We delivered significant leverage again this quarter, 180 basis points as a percentage of revenue to 8.4% of revenue, reflecting a continued rigorous focus on operating discipline and the ongoing rationalization of our geographic footprint.

Strong revenue growth, combined with operating leverage and cost discipline led to a record level of adjusted EBITDA of $121 million. Adjusted EBITDA outperformance was driven by higher-than-expected revenue, lower-than-expected transaction losses and higher-than-expected AI-related operating efficiencies.

Net income was $67.6 million, up sevenfold year-over-year, resulting in a 13% net income margin. With several consecutive quarters of solid profitability, we will reference diluted EPS as a key performance metric going forward. Diluted EPS is an increasingly relevant lens through which we measure the business. Diluted EPS was $0.30 in Q3, up over 640% year-over-year.

Our North Star remains growth in free cash flow while managing dilution and Q3 delivered on both. Free cash flow grew to $88 million, reflecting strong operating leverage, partially offset by the timing of working capital. Outstanding shares were 214 million, up 2% year-over-year, reflecting our disciplined approach to dilution management and share repurchase activity.

Stock-based compensation was lower year-over-year for the third consecutive quarter. It declined 1% and at 7.8% of revenue was 176 basis points lower as a percentage of revenue than the third quarter of 2025 due in part to lower headcount. For all of 2026, we expect stock-based compensation to decrease modestly in absolute terms year-over-year. In Q3, we opportunistically bought back $14.4 million worth of stock or 612,000 shares. Year-to-date, we have repurchased 4.5 million shares. We continue to be disciplined in how we deploy capital towards buybacks.

Let me now share an update on capital allocation. We recently took 2 important measures to improve working capital management and flexibility in how we deploy free cash flow. First, we upsized our revolver to $1 billion from $550 million. We prefund certain customer transactions to ensure funds are available to recipients in a timely manner, which means most of our cash sits overseas. A larger revolver provides us incremental flexibility to use our cash for other corporate needs.

Second, we increased our share buyback authorization from $200 million to $500 million, reflecting both our confidence in the long-term trajectory of the business and our view that repurchasing shares is an attractive use of capital. Taken together, these actions give us more capacity to return capital while ensuring customer demand is fully met.

With that, I will move to our outlook. For the fourth quarter of 2026, we expect revenue of $531 million to $533 million or 20% to 21% growth. We continue to see strong momentum in our core and expect the continued shift toward digital remittances, growth in newer geographies and the scaling of our newer businesses to once again drive year-over-year growth of more than 20%.

Breaking down revenue growth. In Q4, we anticipate send volume growth to exceed revenue growth and revenue growth to exceed quarterly active customer growth. Send volume per active customer is expected to grow in the mid- to high single-digit range, supported by the continued shift in mix towards large transfers and businesses.

For the full year, we expect revenue between $1.989 billion and $1.991 billion, a growth rate of 22%, reflecting strong demand in our core and growing levels of contributions from our newer businesses.

Now let us pivot to profitability and expense guidance, starting with transaction margins. We expect Q4 transaction margins to moderate year-over-year as we face a tough transactional loss rate comparison in the prior year quarter. No transaction loss rates fluctuate quarter-to-quarter. We expect full year transaction margins to be modestly higher than 2025 levels on a normalized basis.

Shifting to marketing. For Q4, we expect marketing spend per QAU to be modestly higher year-over-year as we invest in customer growth, extend our Skip the Line campaign and increase brand marketing. Marketing expense per QAU faces a difficult comparison in Q4 as last year benefited from a deliberate approach to holiday period spend. As a reminder, Q4 is a seasonally high marketing investment quarter. These investments set us up well for 2027.

Putting this all together, we expect Q4 adjusted EBITDA to be between $104 million and $106 million or around 20% margin. For the full year, we expect adjusted EBITDA to be between $441 million and $443 million, representing an adjusted EBITDA margin of around 22%, an expansion of more than 550 basis points year-over-year. This improved adjusted EBITDA outlook reflects a more favorable outlook for revenue, our commitment to cost discipline and our ability to leverage AI as we invest in growth. Our outlook also assumes normal levels of transaction losses for Q4.

Now let me share some early thoughts on 2027. We expect revenue growth to be in the high-teens range for next year. This outlook assumes continued strength in our core and strong growth in newer businesses. As always, foreign exchange volatility, geopolitics and macroeconomic conditions are difficult to predict 1 year in advance. And while we expect to continue to take share through digital conversions of cash remittance volumes, we face a tough comp associated with the initial implementation of the 1% remittance tax. Therefore, we currently expect revenue growth to be at the lower end of this range. This is an early look, and Q4 results will be important in shaping our formal guidance for the year.

Moving to profitability. We expect 2027 adjusted EBITDA margins to be broadly in line with our guidance for 2026. As noted on prior earnings calls, adjusted EBITDA in 2026 benefited from lower-than-expected expenses due primarily to the reassessment of business initiatives following Sebastian's arrival. In 2027, we expect a more normalized level of investment spending. But as always, we will remain disciplined, ensuring a high return on capital and a balance between growth and profitability.

Before I close, let me come back to the framework we laid out at Investor Day last year. We remain committed to delivering more than a Rule of 40 outcome through 2028, defined as the sum of our revenue growth CAGR from 2025 to 2028 plus our 2028 adjusted EBITDA margin. This framework reflects a balanced approach to growth, profitability and investment and is the way in which we run the business.

To summarize, in Q3, we delivered another quarter of excellent results across our key financial metrics. We delivered record revenue, adjusted EBITDA and adjusted EBITDA margin and a more than sevenfold year-over-year increase in net income, underscoring the power and scalability of our business model.

With that, Sebastian and I will open up the call for your questions. Operator?

Operator

[Operator Instructions] First question will come from the line of Ramsey El-Assal from Cantor Fitzgerald.

Perguntas e respostas

Ramsey El-Assal

Vikas, I was wondering if you could help us quantify the in-quarter impact from the Reserve Bank of India's temporary foreign currency measures. I know that they ended a month earlier than you anticipated, but I'm just trying to figure out what the result would have been had that headwind not been in numbers.

Vikas Mehta

Yes. First of all, thank you for the question. And I just wanted to start off with just reiterating that it was an excellent quarter, record revenue. Most importantly, the transaction margin dollars growing at 27% and a record high transaction margin percentage.

If you look at specifically the high-value centers or as we now call it large transfers, there are 2 parts to the story. One is the India story where your question is and one is beyond that. And let me just share the beyond India story first very quickly and then get to your questions. Beyond India, we continue to see really strong strength in large transfers, and this was mostly because of just a very deliberate focus that we are putting on this part of the business as well as newer features that we have introduced, including remedy reserves and price guarantees. And that resulted in a growth of over 80% volume growth for the non-India side of business.

Now if you look at India specifically, and I did visit India recently meeting a lot of the partner banks and got the firsthand commentary as well. And they saw a very interesting dynamic, which is for us, the scheme was across 2 quarters, both Q2 and Q3. And as you know, we provided some commentary in Q2. The first phase of that scheme garnered around $50 billion in volume. And then RBI announced that it would shorten the duration of that scheme by a month. And then there was a massive acceleration in that amount and that reached more than $125 of mobilization through that scheme, which to give you some context is greater than 80% of annual remittances to India. So definitely, the scheme had a sizable impact and drew a pretty large balance, which the money transfer operators really did not participate in.

Now it's hard to quantify what was the actual impact on the growth rate, but the dimensions that I gave you hopefully help you understand the magnitude of it. I just want to reiterate again that even if you -- including the impact of that, we were able to grow overall 50% plus over the last 12 months from a volume growth perspective. So we feel very optimistic about the large transfer business. And while there will be a pull forward impact from this, we feel over time it will deliver results.

Operator

And our next question will come from the line of Tien-Tsin Huang from JPMorgan.

Tien-Tsin Huang

Thanks for sharing the '27 views. I'm just curious, thinking about the high-teens revenue growth and the similar margins as '26 as you've called out. Should we consider this initial look as a deliberate investment year comment given the margin discussion plus some of the AI potential? I know there's a lot of focus on the accelerator. So I just want to understand what the framework is.

Vikas Mehta

Thank you for the question. And if you look at FY '27 view, first of all, I'd say that it's an early look to help you think about the 2027 growth. Now the key point is with excellent performances through the year, including Q3 and Q4 foundation that we will set that will then create the right setup for FY '27.

I'll share a few thoughts on the revenue assumptions and profitability assumptions, which will help you model things better. The first is, we've seen continued strength in the core business, and we expect that to continue. And we will continue to focus on the newer geographies that we are investing in like UAE. So feel very good about that. In addition to that, we have the newer businesses and we expect strong growth to continue. And as we have shared, this will contribute more than 10% of the revenue in 2028.

Now 2 important points to additionally highlight. The first one is remittance tax will lap. So it will have tougher comps. And secondly, the card business is a newer business that will ramp through '27 and we'll start seeing a material impact from 2028 and beyond. Outside of that, as you very well know, FX volatility, geopolitics are all difficult to model. But overall, we feel very optimistic.

Shifting to profitability assumptions, continued operating discipline, as you have seen from us. But to your point, yes, there will be the reassessment period of priorities is over. And as Sebastian now shifts his attention on these key priorities will be in an investment mode, but in a very thoughtful way, in a disciplined way, similar to what you have seen from us.

Just highlighting a couple of important nuances here. And keep in mind that transaction loss has been a good guide for us over the last few quarters. As we look at 2028 to '27, we are continuing to model in the same range that we have shared, which is the 9 to 13 bps with average of 11 bps. And in fact, if you normalize '26 for that, then you will see, in fact, an expansion in margin in a theoretical way.

And the final point there is, AI has been a really good positive for us from a productivity as well as a cost perspective. We'll continue to see benefits, but 2026 was definitely a very strong year from that. So overall, looking forward to a balanced equation of growth, profitability and investment as we head into 2027.

Sebastian Gunningham

Yes. And also -- thanks for the question. I'd also add that you've probably seen really an increase in the buildup of new products and features. And we did that over the last 6 months with really no increase in headcount or investment. So we've been very, very frugal in the way we do this. And of course, AI is helping us. When I think about the investment for the next 12 months and then I put my AI hat on, it really is a new equation that's emerging because very small teams can launch stuff very fast. And so, we think -- and you're reflecting this on the new products, we think we have a tailwind building on the speed and the effectiveness of the products that we can launch globally. So it's a very interesting moment as we look at the next 12 months, certainly from a product perspective and an investment perspective.

Operator

Our next question comes from the line of Cris Kennedy from William Blair.

Cristopher Kennedy

Just wanted to follow-up on Tien-Tsin's question. Vikas, can you just kind of compare and contrast your visibility today versus your visibility last year? It's kind of the same setup in terms of your preliminary outlook.

Vikas Mehta

Yes. I think that's a great question. And even reflecting back, one thing comes out very clear that the ability to forecast out is extremely difficult, and we saw so many moving pieces that we hadn't expected like the RBI scheme as well as just the geopolitical dynamics. So clearly, uncertainty remains. And I would say that a few things that we use as our basis for projection that makes us feel very, very confident. First of all, a lot of our business is based on past cohorts and being able to model that cohorts gives us more and more stability of that.

The second thing I'd say that has changed this year versus last year is just the use of AI and ML when it comes to forecasting, whether it is for our business purposes or for our revenue projections. And we feel that over the last couple of quarters, we have been able to really get precise in our forecasting. So that would be a positive change from just getting close to our forecasting accuracy goals over here.

Outside of that, the newer businesses, I'd say, are in a more mature stage or more evolved stage than what they were last year, which gives us more confidence. So overall, a few puts and takes, but feeling very good about forecasting accuracy internally. And secondly, just the strength of cohorts that gives us confidence in our outlook.

Operator

And our next question will come from the line of Alex Markgraff from KBC Markets.

Alexander Markgraff

Maybe just a quick question on QAU growth. It's a bit slower than anticipated. Just curious if we should be kind of -- the right level we should be thinking about if there's kind of a step down in growth to be considering here with the shift to larger customers and business customers or if there's something sort of seasonal or onetime to consider in the 3Q number?

Vikas Mehta

I'm glad you asked that question because I think there are a few nuances which I want to highlight a bit. But before that, I'll just zoom out and share an important aspect, which is the key metric because sometimes we can look at the smaller part of the equation and that could be misleading. Our biggest level goal is the free cash flow per share. If you look at specific line items, transaction margin dollars is where we are anchored. As I shared earlier, transaction margin was the highest that we've had at 68% and the margin dollar growth was 27%. If you look even sort of more detailed into the volume growth, which is quarterly active users times the spend per QAU, it was 25%. And again, we had a record spend per quarterly active user. And in addition to that, we had record transactions per QAU this quarter. So really very, very good underlying trends of the business.

Now if we go into the nuances, and this gives me an opportunity to share a few important points. The first is, there is a sequential view versus a year-over-year view. And if you look at a year-over-year view, really very strong trends over here. Overall growth of 17% to your point, the mix played an important role where both the large transfers and business customers are driving more strength over here. So it's about the quality of QAU rather than just the QAU number, and that's what helped us to get to a record spend per QAU.

And to give you more flavor of that, the NPAs or the new customers acquired this quarter were higher year-over-year. So we saw underlying strong strength there. And in addition to that, one of the metrics that I like a lot personally, which is the net dollar retention rate was the highest that we have ever seen. So both on the customer acquisition as well as the retention front, it was a really very strong quarter.

Now looking at it sequentially is very important on the nuances. The first point I'd highlight is that, as you will note on Slide #10, we have highlighted that Q2 was revised, and that was the only quarter that was revised due to data migration that we did, and that just the Q2 number, first of all, take note of that on Slide 10.

The second important nuance over there is, with remittance tax, H1 has been really very strong from a customer acquisition perspective, especially on the offline to digital customers. And Q2, in fact, was the record new customer acquisition quarter for us. So there's a little bit of a comparison also aspect there. Overall, really a strong quarter from a quarterly active user perspective, the growth, the quality of acquisition, even as you see the leverage that we are getting in marketing. So we are able to drive acquisition at the right cost. So overall, really fundamentally a very strong business. Acquisition is strong and being able to target the right customers.

Operator

Our next question will come from the line of David Scharf from Citizens Capital Markets.

Zachary Oster

This is Zach on for David. Congrats on the strong quarter. I wanted to dig in a little bit more on the quarterly active users growth. So a little bit of a diversion between the send volume growth and the active users growth, kind of a 900 basis point gap between the 2 versus 800 last quarter. Obviously, not -- still good growth overall, but I wanted to see if we can kind of get more context on how the mix shift might drive growth in send volume per average customer.

Vikas Mehta

Yes. So similar to the previous answer I gave, underlying really strong trends that you can see in the business. And again, I'd highlight the most important metric that we look at is the transaction margin dollar growth, which was 27% and highest transaction margin at 68% that we have ever had. If you look at the volume trends, the volume trends were very strong with record spend per QAU, which was driven again by the record transactions per QAU. And that was in addition to the mix shift that we are seeing where we are seeing north of 30,000 businesses, which are helping drive that as well as large transfer volume, which continues to be in a positive direction. So overall, the fundamentals of the business are very strong.

From a QAU perspective, as I shared, a few nuances, I'll not repeat those. But overall, strong growth at 17% and the key is that, it sets us up really well in our business for future growth. And that's why we are very confident about Q4 as well as '27.

Operator

And our next question will come from the line of Aditya Buddhavarapu from Bank of America.

Aditya Buddhavarapu

Just a couple for me. Firstly, when you -- if we go back to the EBITDA margin outlook for 2027, could you just break it down in terms of the key areas of investment thinking about? So when we look at the areas like marketing, tech spending, customer support, et cetera, where do you think the focus will be? And in general, which markets or products would you be focusing on?

And second question, could you just go back to what you said on pricing. So you mentioned that cost -- the lowest cost to serve ultimately win. So when you think about the future benefit -- scale benefits and the future network cost savings that you get, do you look at reinvesting that into lower pricing? Or do you sort of think you can back in the margin as we go forward?

Sebastian Gunningham

Yes. So on the 2027 investment priorities, you mentioned marketing. I'd say yes to all. And we're getting -- we're significantly getting this AI tailwind everywhere. We're getting it in CS. We're getting it in products. We're getting it in marketing. And so you have these 2 forces. You have -- we are investing and we're investing across the company, but we're also getting this tailwind from AI. So we have to move the dial pretty much it's almost on a weekly basis at this point because you get very quick responses and very quick outcomes. If you look at how -- look at 2027, even the software factory or the product factory is probably duplicating its output every 3 or 4 months. And so, it's -- I'm being evasive because it's a yes answer to everything you said, but it doesn't necessarily mean that it adds dollars to the investment. It's just we are investing more, but I think we're investing more by also getting much more output from the structure that we have.

And like -- I think like every company in the world right now, you're trying to measure how fast can you adopt AI. And so -- because there are some bottlenecks in safety and there's some bottlenecks in skill sets, but we're at the leading edge of adopting across the business, and you mentioned a few. And so I think our output -- let me put it this way. I think our investment was going to continue very strong, but our output in 2027 may be very interesting to watch.

Operator

Our next question will come from the line of Gus Gala from MCH.

Gustavo Gala

I'm just holding the '27 margin broadly in line with calendar '26, just it shakes out to like a 22% incremental. I think that's below calendar '24 incremental margins. I just want to understand what is -- let's just balance it this way. What is the core versus the new products that we'll be investing in? Will we expect maybe just kind of help us think about the snapback in margins over the longer run. And then just reconciling the growth in margin comments a bit with competitors, our sense of the larger legacy guys slowing the price competition, perhaps a little bit squeezed on marketing dollars because they're getting closer to a breakeven level, right, network effects unwinding and all that. Just help us unpack the thinking here. You guys have given good cushion in the past. I think investors really want to know what is conservatism here and what is, "Hey, we're seeing an inflection, hey, the share shift from cash to digital will be slower next year because of the lap." All that would be very helpful.

Vikas Mehta

Yes. Let me -- thank you for the question. Very, very articulate and very clear question. And I'll start and then Sebastian can add more flavor on the investments and other thoughts. So if you look at FY '27, first of all, this is an early look, right? We just wanted to give you the balanced equation of growth and profitability. The second thing I'd say is that, as you look at FY '27, 2 important points. One is transaction loss. I talked about it, which is we are taking this 11 basis point assumption. That's our standing assumption 9 to 13 bps early right now to talk about '27, but we still wanted to give you a view. If you normalize '26, let's say, for example, taking that 11 bps, then it would be a 50 bps expansion and not flat year-over-year. So that's just one flavor to show you the sensitivity of some of the variables and potential upside in some sense.

Second, again, it's early to say right now because we're still not done with Q4. But whether you think about marketing or CS or others, we have leveraged across each line, and we feel really good going into '27. But I think like one quarter early to talk specifics about that. But overall, we feel really good.

The final point which Sebastian talked a lot about in his prior answer, which is AI. We feel AI will continue to give. Now look, we all are looking at AI token costs and how they have reduced. I talked about that earlier, which is like 55% reduction there. And we don't know what that will be next year. So if the cost benefits continue to be at the same pace as this year, we could see better outcomes, but that's something that we did not want to start making predictions around. So overall, we feel really good about '27 and being able to give you an early look at that in Q4 is something that we felt confident this time that we could do that. So we get that.

But I'll hand it over to Sebastian to share additional thoughts on...

Sebastian Gunningham

Two quick high-level thoughts on -- you pointed out marketing. Marketing is evolving. I mean, AI is changing marketing. And while we have some very well-defined customer acquisition and long-term value guidelines and how we invest, AI is changing that mix, and we think it's a tailwind for the business. Of course, the larger you get, you get the benefits of word of mouth. So we're monitoring that very carefully. I do believe that over time, we will continue to get more efficient and probably get the benefits of AI.

On the investment on the newer businesses, if you looked at the size of the -- these new businesses have the luxury of starting from a white sheet of paper for the most part. And so they've been assembled as AI-first teams. And so if you looked at the investment, your reaction, you should probably -- given the signals that we're seeing, you should probably say, why aren't you investing more? And the answer to that is because we're moving very fast. We're getting the benefits of AI with these teams. They are generally smaller teams than any business we would have built 10 years ago. So that -- it's very fluid, and that's what we're -- our projections for the investment in 2027 have those tailwinds behind it, but a lot of stuff that we're learning as we go forward.

Operator

Thank you. And this concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.