Shares of Remitly Global (RELY -0.21%) were tumbling today after the remittance specialist missed the mark in its first-quarter earnings report.
As a result, the stock was down 11.4% as of 2:29 p.m. ET.
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Remitly comes up short on the top line
Remitly delivered solid results in the quarter, but the company is still unprofitable and valued as a growth stock. That means that it's likely to get punished if it comes up short on the top line, and that's exactly what happened today.
Revenue in the quarter rose 32% to $269.1 million, but that was a bit shy of the consensus of $274 million. Active customers rose 36% to 6.2 million, and send volume jumped 34% to $11.5 billion.
The company also made progress on the cost side as it controlled spending on a number of line items, including transaction expenses, customer support, and general and administrative expenses. On the bottom line, it showed improvement, as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $5.4 million to $19.3 million. On a generally accepted accounting principles (GAAP) basis, its loss per share narrowed from $0.16 to $0.11, beating estimates at a loss of $0.14 per share.
CEO Matt Oppenheimer said, "We are pleased with our strong start to the year that reflects our resilient customer base and superior customer experience."
What's next for Remitly?
The sell-off in Remitly shares was a bit surprising considering that the company also raised its EBITDA guidance for the year.
Remitly, which competes with money-transfer specialists like Western Union and Moneygram, maintained its full-year revenue forecast of $1.225 billion-$1.25 billion, representing 30%-32% growth, but raised its EBITDA forecast from $75 million-$90 million to $85 million-$95 million.
Nonetheless, investors still seem concerned about the first-quarter miss, although it seems unlikely to impact full-year results.
Remitly continues to look like a promising growth stock, but investors should continue to expect volatility here.
