Money transfer app Remitly has taken significant market share from incumbents such as Western Union since it was founded in 2011, but its share price has fallen this year.
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Remitly, a financial technology company that allows consumers in places like the US and Canada to send money to countries like Mexico and the Philippines, may finally see the effects of President Trump’s immigration crackdown on its business.
The 14-year-old Seattle company reported its third-quarter financial results yesterday, and some metrics rattled investors, sending the stock down 24% today and shrinking its market value to $2.6 billion.
Chief financial officer Vikas Mehta said the company expects revenue in the fourth quarter to reach about $427 million, representing growth of about 22 percent. In 2026, sales growth will be “in the high teenage range.” Those expected rates of expansion are big drops from Remitly’s quarterly growth of 24% to 34% last year, even though the company has recently rolled out new products, including a send-now, pay-later feature that has already attracted 100,000 active customers. Remitly’s earnings also fell slightly in the third quarter compared to the second, according to the company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
If the decline in Remitly stock holds for the rest of the day, it will mark one of the biggest one-day declines since it went public in 2021 at a $7 billion valuation. Compared to the end of last year, Remitly’s stock is down 44%. Concerns about cryptocurrency-based stablecoins disrupting its business have likely weighed on the stock.
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Remitly has 8.9 million active customers, many of whom are immigrants. They send about $20 billion every quarter through the app, and Mexico is one of the top three markets they send money to. In the first nine months of this year, as a result of President Trump’s crackdown on Mexican immigration to the U.S., consumer remittance payments to Mexico fell 5.5 percent to $45.7 billion, reversing a long-term upward trend, according to Mexico’s central bank.
On yesterday’s earnings call, CFO Mehta said Remitly’s customers’ remittances in Mexico grew “significantly faster in this corridor than the broader industry,” helped by innovations such as QR code-based cash pickup. However, when discussing the company’s forecast for 2026, he said “recent immigration headwinds” in countries such as the US and Canada “could potentially impact new customer acquisition”. The US immigrant population began to decline this year for the first time in 50 years, according to Pew Research.
When FT Partners research analyst Gunn asked what’s driving the expected slowdown in the fourth quarter and all of 2026, the only explanation Mehta gave was how in the second half of 2024, the company had “very strong revenue growth,” which sets a higher bar that’s harder to beat.
The lack of a clear explanation for the slowdown may be another reason why the stock has fallen so much. Beyond a crackdown on immigration and lower potential remittances to Mexico, it’s unclear what’s really driving the weaker growth expectations, and investors hate uncertainty. In a briefing note, Gunn wrote that the third-quarter earnings release “leaves us with more questions than answers.”
