Core Insights - Expensify reported Q2 2025 results with GAAP revenue of $35.8 million, below analyst expectations of $36.5 million, and a non-GAAP EPS loss of $0.02, missing forecasts for a $0.02 profit [1][2][5] Financial Performance - Year-over-year GAAP revenue increased by 7.5% from $33.3 million in Q2 2024 to $35.8 million in Q2 2025 [2][5] - Non-GAAP EPS declined by 133.3% from a profit of $0.06 in Q2 2024 to a loss of $0.02 in Q2 2025 [2][5] - Adjusted EBITDA turned negative at $(1.4) million compared to a positive $10.2 million in Q2 2024 [2][5] - Free cash flow increased by 10.5% year-over-year, reaching $6.3 million [2][7] Operational Challenges - The number of paid members decreased by 5% year-over-year to 652,000, indicating user retention issues [5][11] - Net loss widened significantly to $8.8 million from a $2.8 million loss in the prior year [5][11] - Sales and marketing expenses surged to $14.3 million from $3.1 million, contributing to total operating expenses rising by 55% year-over-year [6][11] Strategic Focus - Expensify targets small and medium-sized businesses with its software-as-a-service solutions for expense management [3] - The company emphasizes product-led growth, simplicity, and viral adoption, with recent initiatives including AI-powered tools and international expansion [4][8] Future Outlook - Expensify raised its free cash flow outlook for FY2025 to a range of $19.0 million to $23.0 million [10] - Key areas to monitor include trends in paid members, gross margin changes, and the impact of new product launches on user retention [11]

Financial Performance - Q2 2025 revenue reached $35.8 million[14] - The company had 652,000 average paid members in Q2 2025[15] - Total interchange for Q2 2025 was $5.3 million[17] - Q2 2025 operating cash flow was $8.9 million[20] - Free cash flow for Q2 2025 was $6.3 million, a 10% increase year-over-year[23, 26] - Non-GAAP net loss for Q2 2025 was $(1.9) million[20] - Adjusted EBITDA for Q2 2025 was $(1.4) million[24] - The company is increasing its FY 2025 free cash flow guidance to a range of $19.0 million to $23.0 million[26] Marketing Impact - The company estimates that the F1 movie generated an equivalent value of $61.0 million in marketing dollars[36] - The F1 movie increased unaided brand awareness by 50% among the core demographic (ages 18-54)[37] - The F1 movie increased unaided brand awareness by 350% among the next generation of bottom-up adopters (ages 18-24)[42]

[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines that the report contains forward-looking statements subject to substantial risks and uncertainties, which the company does not commit to updating unless legally required [Forward-Looking Statements Overview](index=4&type=section&id=Forward-Looking%20Statements%20Overview) The report contains forward-looking statements subject to substantial risks and uncertainties, which the company does not commit to updating unless legally required - Forward-looking statements are subject to **substantial risks and uncertainties**, including financial performance, market competition, operating expenses, liquidity, geopolitical tensions, inflation, and AI impact[10](index=10&type=chunk)[11](index=11&type=chunk)[14](index=14&type=chunk) - The company **does not commit to updating** forward-looking statements unless legally required[12](index=12&type=chunk) [Part I - Financial Information](index=7&type=section&id=Part%20I%20-%20Financial%20Information) This part presents the company's condensed consolidated financial statements, management's discussion and analysis, and disclosures on market risk and controls [Item 1. Condensed Consolidated Financial Statements](index=7&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Expensify's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$187.14 million**, liabilities to **$55.32 million**, and stockholders' equity to **$131.82 million** as of June 30, 2025 Balance Sheet Summary | Metric | As of June 30, 2025 (in thousands) | As of December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------- | :---------------------------------- | :----------------------------------- | :-------------------- | :--------- | | Total Assets | $187,138 | $173,680 | $13,458 | 7.75% | | Total Liabilities | $55,323 | $45,437 | $9,886 | 21.76% | | Total Stockholders' Equity | $131,815 | $128,243 | $3,572 | 2.79% | - Cash and cash equivalents increased by **$11.75 million (24.1%)** from **$48.77 million** to **$60.52 million**[19](index=19&type=chunk) - Settlement assets, net, increased by **$10.31 million (24.3%)** from **$42.41 million** to **$52.72 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss significantly increased to **$8.79 million** (3 months) and **$11.96 million** (6 months) despite revenue growth, driven by higher sales and marketing expenses Three Months Ended June 30 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :-------------------- | :--------- | | Revenue | $35,764 | $33,288 | $2,476 | 7.44% | | Gross margin | $18,577 | $18,925 | $(348) | -1.84% | | Net loss | $(8,788) | $(2,764) | $(6,024) | 217.94% | | Basic and diluted EPS | $(0.10) | $(0.03) | $(0.07) | 233.33% | Six Months Ended June 30 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | :--------- | | Revenue | $71,838 | $66,823 | $5,015 | 7.50% | | Gross margin | $36,819 | $37,876 | $(1,057) | -2.79% | | Net loss | $(11,957) | $(6,545) | $(5,412) | 82.69% | | Basic and diluted EPS | $(0.13) | $(0.08) | $(0.05) | 62.50% | - Sales and marketing expenses significantly increased by **$11.27 million (367%)** for the three months ended June 30, 2025, and by **$11.43 million (177%)** for the six months ended June 30, 2025, primarily due to advertising for F1® The Movie sponsorship[21](index=21&type=chunk)[132](index=132&type=chunk)[141](index=141&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to **$131.82 million**, influenced by **$15.69 million** in stock-based compensation and a **$11.96 million** net loss Stockholders' Equity Activities | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Stock-based compensation | $15,692 | $17,466 |\n| Issuance of common stock under Matching Plan | $2,610 | $2,004 |\n| Repurchase and retirement of common stock | $(3,026) | $0 |\n| Net loss | $(11,957) | $(6,545) | - Total stockholders' equity increased by **$3.57 million** from December 31, 2024, to June 30, 2025[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$13.72 million**, investing cash flow decreased to **$1.67 million**, and financing cash flow was **$(0.46) million** for the six months ended June 30, 2025 Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :--------- | | Net cash provided by operating activities | $13,721 | $12,788 | $933 | 7.30% | | Net cash used in investing activities | $(1,672) | $(4,867) | $3,195 | -65.65% | | Net cash (used in) provided by financing activities | $(455) | $1,816 | $(2,271) | -125.06% | | Net increase in cash and cash equivalents and restricted cash | $11,594 | $9,737 | $1,857 | 19.07% | - Operating cash flow increase was primarily due to **higher interchange revenue** and **decreased SmartScan costs**, partially offset by lower subscription revenue and increased marketing spend[148](index=148&type=chunk) - Investing cash flow decrease was mainly due to **lower employee and external contributor software development costs**[149](index=149&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering various financial components and policies [NOTE 1 – GENERAL INFORMATION](index=15&type=section&id=NOTE%201%20%E2%80%93%20GENERAL%20INFORMATION) Expensify provides a cloud-based expense management platform and card services, operating as a single reportable segment under GAAP and SEC rules - Expensify offers a **comprehensive expense management platform** and the **Expensify Card**, simplifying expense and bill management for employees and vendors[34](index=34&type=chunk)[35](index=35&type=chunk) - The **Updated Card Program**, launched in **February 2024**, operates under an agreement with The Bancorp Bank, N.A[36](index=36&type=chunk) - The company operates as **one reportable segment**, with the CODM reviewing financial information on a consolidated basis[43](index=43&type=chunk) [NOTE 2 - REVENUE AND CERTAIN STATEMENT OF OPERATIONS COMPONENTS](index=17&type=section&id=NOTE%202%20-%20REVENUE%20AND%20CERTAIN%20STATEMENT%20OF%20OPERATIONS%20COMPONENTS) Revenue increased by **7-8%**, driven by significant interchange revenue from the Updated Card Program, offsetting decreased Legacy Card Program consideration Revenue by Source and Location | Revenue Source (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $35,764 | $33,288 | $71,838 | $66,823 | | United States Revenue | $32,609 | $30,179 | $65,683 | $60,692 | | All other locations Revenue | $3,155 | $3,109 | $6,155 | $6,131 | | Cashback Rewards (contra revenue) | $2,500 | $2,000 | $4,800 | $4,000 | | Interchange Revenue | $5,300 | $500 | $10,300 | $500 | - Interchange revenue from the Updated Card Program significantly increased to **$5.3 million** (3 months) and **$10.3 million** (6 months) in 2025, up from **$0.5 million** in 2024 for both periods[50](index=50&type=chunk) - Consideration from vendor under the Legacy Card Program, net of fees, was **immaterial for 2025**, down from **$3.1 million** (3 months) and **$6.3 million** (6 months) in 2024, indicating a shift to the Updated Card Program[52](index=52&type=chunk) [NOTE 3 - CERTAIN BALANCE SHEET COMPONENTS](index=18&type=section&id=NOTE%203%20-%20CERTAIN%20BALANCE%20SHEET%20COMPONENTS) Other current assets increased to **$24.28 million**, while capitalized software, net, decreased to **$14.87 million** due to amortization Other Current Assets | Other Current Assets (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------------------- | :------------------ | :---------------------- | | Expensify Card posted collateral | $13,280 | $12,415 | | Expensify.org restricted cash | $6,030 | $5,972 | | Income tax receivable | $2,573 | $429 | | Earned interchange restricted cash | $1,651 | $1,442 | | Total Other Current Assets | $24,277 | $20,908 | Capitalized Software, Net | Capitalized Software, Net (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--------------------------------------- | :------------------ | :---------------------- | | Capitalized software development costs | $33,630 | $32,332 | | Less: accumulated amortization | $(18,764) | $(16,100) |\n| Capitalized software, net | $14,866 | $16,232 | - Amortization expense for capitalized software development costs was **$3.7 million** for the six months ended June 30, 2025, up from **$2.5 million** in the prior year[54](index=54&type=chunk) [NOTE 4 - COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%204%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company repaid its mortgage, terminated its revolving credit facility, and maintains a **$7.5 million** letter of credit, with no material legal contingencies - The **$8.3 million** amortizing term mortgage was fully repaid in August 2024[59](index=59&type=chunk)[152](index=152&type=chunk) - The **$25.0 million** revolving credit facility was terminated on July 1, 2025, with no outstanding borrowings[68](index=68&type=chunk)[159](index=159&type=chunk) - A **$7.5 million** irrevocable standby Letter of Credit, increased from **$1.0 million** in April 2025, remains outstanding and is secured with cash collateral[61](index=61&type=chunk)[68](index=68&type=chunk)[154](index=154&type=chunk)[159](index=159&type=chunk) [NOTE 5 - STOCK INCENTIVE PLANS](index=21&type=section&id=NOTE%205%20-%20STOCK%20INCENTIVE%20PLANS) As of June 30, 2025, **24.29 million** shares were available under 2021 Incentive Plans, with stock-based compensation expense totaling **$14.92 million** for the six months - As of June 30, 2025, **24,293,896 shares** of Class A common stock were reserved and available for issuance under the 2021 Incentive Plans[75](index=75&type=chunk) Stock-Based Compensation Expense | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Matching Plan shares | $973 | $1,141 | $2,500 | $2,570 | | Equity-classified restricted stock units | $5,937 | $7,029 | $12,013 | $13,290 | | Settlement of liability-classified restricted stock units | $344 | $0 | $344 | $0 | | Stock options | $209 | $857 | $835 | $1,606 | | Total stock-based compensation | $7,463 | $9,027 | $15,692 | $17,466 | | Less: capitalized as software development costs | $(536) | $(646) | $(775) | $(1,561) | | Total stock-based compensation expense | $6,927 | $8,381 | $14,917 | $15,905 | - Unamortized stock-based compensation expense for unvested equity-classified RSUs was **$86.3 million**, expected to be recognized over **4.02 years**[84](index=84&type=chunk) [NOTE 6 - INCOME TAXES](index=26&type=section&id=NOTE%206%20-%20INCOME%20TAXES) The company recorded a **$0.7 million** tax benefit (3 months) and **$1.3 million** tax provision (6 months) in 2025, with the IRS concluding its 2021 examination without adjustments Income Tax Summary | Income Tax (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Benefit from (provision for) income taxes | $661 | $(2,723) | $(1,345) | $(3,757) | | Effective tax rate | 7.0% | (6,641.5)% | (12.7)% | (134.8)% | - The IRS examination of the 2021 federal tax return concluded with **no proposed adjustments**[97](index=97&type=chunk) - **New tax legislation (H.R.1)** enacted July 4, 2025, modifying corporate income tax code, is being evaluated for potential impacts on financial statements[98](index=98&type=chunk)[125](index=125&type=chunk) [NOTE 7 - NET LOSS PER SHARE](index=27&type=section&id=NOTE%207%20-%20NET%20LOSS%20PER%20SHARE) Basic and diluted net loss per share was **$(0.10)** (3 months) and **$(0.13)** (6 months) in 2025, with potentially dilutive shares excluded due to net loss Net Loss Per Share | Net Loss Per Share | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic and Diluted | $(0.10) | $(0.03) | $(0.13) | $(0.08) | - Weighted average shares of common stock used to compute net loss per share increased to **92.27 million** (3 months) and **91.89 million** (6 months) in 2025, from **86.59 million** and **85.87 million** in 2024, respectively[99](index=99&type=chunk)[101](index=101&type=chunk) - Potentially dilutive shares (stock options, Matching Plan shares) were excluded from diluted EPS calculations as their effect would have been **anti-dilutive** due to the net loss[104](index=104&type=chunk) [NOTE 8 - EQUITY](index=29&type=section&id=NOTE%208%20-%20EQUITY) A new **$50.0 million** share repurchase program was approved in February 2025, with **$3.0 million** in repurchases during the quarter, leaving **$47.0 million** remaining - A new **$50.0 million** 2025 Share Repurchase Program was approved in February 2025, replacing the 2022 program[106](index=106&type=chunk)[151](index=151&type=chunk) Share Repurchase Activity | Period | Total Shares Purchased | Weighted Average Price Paid Per Share | Shares Purchased as Part of Publicly Announced Programs | Maximum Dollar Value Remaining Under Program (in thousands) | | :----- | :--------------------- | :------------------------------------ | :------------------------------------------------------ | :---------------------------------------------------------- | | May 1 - 31, 2025 | 478,307 | $2.32 | 478,307 | $48,890 | | June 1 - 30, 2025 | 807,029 | $2.34 | 807,029 | $47,000 | | **Total (3 months)** | **1,285,336** | **$2.33** | **1,285,336** | **$47,000** | - **No shares were repurchased** under the 2022 Share Repurchase Program during the three and six months ended June 30, 2024[107](index=107&type=chunk) [NOTE 9 - RELATED PARTY TRANSACTIONS](index=30&type=section&id=NOTE%209%20-%20RELATED%20PARTY%20TRANSACTIONS) No significant related party transactions were reported as of June 30, 2025 - **No significant related party transactions** were reported as of June 30, 2025[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources, including key business metrics [OVERVIEW](index=31&type=section&id=OVERVIEW) Expensify, a cloud-based expense management platform, processed **1.8 billion** transactions and served **652,000** paid members across **42,800** companies as of June 30, 2025 - Expensify is a cloud-based expense management software platform, founded in 2008, with over **15 million members**[110](index=110&type=chunk) - As of June 30, 2025, the platform had processed **1.8 billion expense transactions**[110](index=110&type=chunk) Key Platform Metrics | Metric | Three Months Ended June 30, 2025 | | :----- | :------------------------------- | | Paid members (average) | 652,000 | | Companies (average) | 42,800 | [MACROECONOMIC TRENDS](index=31&type=section&id=MACROECONOMIC%20TRENDS) The company's business is sensitive to economic conditions, with elevated inflation, potential recession, and trade issues creating uncertainty and potential negative impacts - Business operations are dependent on the overall economy, with potential negative impacts from **slower economic growth and recession**[111](index=111&type=chunk) - Elevated inflation rates, further inflation risk, and tariff/trade issues contribute to **economic uncertainty**[111](index=111&type=chunk) [Components of Results of Operations](index=32&type=section&id=Components%20of%20Results%20of%20Operations) Revenue is primarily from subscription fees and interchange revenue, with costs including hosting and processing, and operating expenses covering R&D, G&A, and Sales & Marketing - Revenue is primarily from **subscription fees** for cloud-based expense management, based on active members and service level[112](index=112&type=chunk) - Interchange revenue from the Updated Card Program is recognized on a **gross basis**, while cashback rewards are recorded as **contra revenue**[115](index=115&type=chunk)[116](index=116&type=chunk) - Sales and marketing expenses are expected to **decrease quarter-over-quarter** due to a one-time charge related to the F1® The Movie sponsorship in Q2 2025[122](index=122&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) The company reported increased net losses of **$8.79 million** (3 months) and **$11.96 million** (6 months), driven by a **367%** surge in sales and marketing expenses Consolidated Results of Operations | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $35,764 | $33,288 | $71,838 | $66,823 | | Gross margin | $18,577 | $18,925 | $36,819 | $37,876 | | (Loss) income from operations | $(10,338) | $219 | $(11,825) | $(1,574) | | Net loss | $(8,788) | $(2,764) | $(11,957) | $(6,545) | | Net loss per share (Basic and diluted) | $(0.10) | $(0.03) | $(0.13) | $(0.08) | - Sales and marketing expenses surged by **$11.27 million (367%)** for the three months and **$11.43 million (177%)** for the six months ended June 30, 2025, largely due to F1® The Movie sponsorship advertising[126](index=126&type=chunk) - Research and development expenses decreased by **19%** (3 months) and **15%** (6 months) due to increased focus on sales and marketing efforts[126](index=126&type=chunk) [COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024](index=36&type=section&id=COMPARISON%20OF%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) Revenue increased by **7%** to **$35.76 million**, but a **367%** surge in sales and marketing expenses led to a net loss of **$8.79 million** for the three months Three-Month Financial Performance Comparison | Metric (in thousands) | 2025 (3 months) | 2024 (3 months) | Change (Amount) | Change (%) | | :-------------------- | :-------------- | :-------------- | :-------------- | :--------- | | Revenue | $35,764 | $33,288 | $2,476 | 7% | | Cost of revenue, net | $17,187 | $14,363 | $2,824 | 20% | | Gross margin | $18,577 | $18,925 | $(348) | (2)% | | Gross margin % | 52% | 57% | | | | Research and development | $5,158 | $6,389 | $(1,231) | (19)% | | General and administrative | $9,411 | $9,245 | $166 | 2% | | Sales and marketing | $14,346 | $3,072 | $11,274 | 367% | | Other income (expenses), net | $889 | $(260) | $1,149 | (442)% | | Benefit from (provision for) income taxes | $661 | $(2,723) | $3,384 | (124)% | - The increase in revenue was primarily due to **interchange revenue from the Updated Card Program**, partially offset by decreased billable activity and increased cashback rewards[127](index=127&type=chunk) - The significant increase in sales and marketing expenses was due to **advertising for the F1® The Movie title sponsorship**[132](index=132&type=chunk) [COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024](index=38&type=section&id=COMPARISON%20OF%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024) Revenue increased by **8%** to **$71.84 million**, but a **177%** surge in sales and marketing expenses resulted in a net loss of **$11.96 million** for the six months Six-Month Financial Performance Comparison | Metric (in thousands) | 2025 (6 months) | 2024 (6 months) | Change (Amount) | Change (%) | | :-------------------- | :-------------- | :-------------- | :-------------- | :--------- | | Revenue | $71,838 | $66,823 | $5,015 | 8% | | Cost of revenue, net | $35,019 | $28,947 | $6,072 | 21% | | Gross margin | $36,819 | $37,876 | $(1,057) | (3)% | | Gross margin % | 51% | 57% | | | | Research and development | $10,516 | $12,318 | $(1,802) | (15)% | | General and administrative | $20,240 | $20,676 | $(436) | (2)% | | Sales and marketing | $17,888 | $6,456 | $11,432 | 177% | | Other income (expenses), net | $1,213 | $(1,214) | $2,427 | (200)% | | Provision for income taxes | $(1,345) | $(3,757) | $2,412 | (64)% | - The increase in revenue was primarily due to **interchange revenue from the Updated Card Program**, partially offset by decreased billable activity and increased cashback rewards[136](index=136&type=chunk) - The significant increase in sales and marketing expenses was due to **advertising for the F1® The Movie title sponsorship**[141](index=141&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Expensify had **$60.5 million** in cash, no outstanding debt, and a **$7.5 million** letter of credit, believing existing resources are sufficient - As of June 30, 2025, the company had **$60.5 million** in cash and cash equivalents and **no outstanding indebtedness**[145](index=145&type=chunk) - The **$25.0 million** revolving credit facility was terminated on July 1, 2025, and the **$7.6 million** amortizing term mortgage was fully repaid in August 2024[152](index=152&type=chunk)[159](index=159&type=chunk) - A **$7.5 million** letter of credit remains outstanding, secured with cash collateral[145](index=145&type=chunk)[154](index=154&type=chunk)[159](index=159&type=chunk) [Key Business Metrics and Non-GAAP Financial Measures](index=43&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Average paid members decreased to **652,000**, while Adjusted EBITDA and Non-GAAP net income declined, and free cash flow increased for both periods Paid Members | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | | Paid members (in thousands) | 652 | 684 | Non-GAAP Financial Measures | Non-GAAP Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $(1,393) | $10,190 | $7,053 | $17,304 | | Adjusted EBITDA margin | (4)% | 31% | 10% | 26% | | Non-GAAP net (loss) income | $(1,861) | $5,617 | $2,960 | $9,360 | | Non-GAAP net (loss) income margin | (5)% | 17% | 4% | 14% | | Free cash flow | $6,311 | $5,718 | $15,415 | $10,910 | | Free cash flow margin | 18% | 17% | 21% | 16% | - Adjusted EBITDA and Non-GAAP net income decreased significantly year-over-year for both the three and six-month periods, reflecting the **increased net loss**[168](index=168&type=chunk)[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in the company's market risk were reported from previous disclosures - **No material changes** in market risk were reported compared to the 2024 Annual Report[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were deemed **effective** at a reasonable assurance level as of June 30, 2025[184](index=184&type=chunk) - **No material changes** in internal control over financial reporting occurred during the period[185](index=185&type=chunk) [Part II - Other Information](index=48&type=section&id=Part%20II%20-%20Other%20Information) This part covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a securities class action and three shareholder derivative lawsuits, which it intends to vigorously defend - A putative securities class action (Wilhite v. Expensify, Inc., et al.) was filed in November 2023, alleging **false or misleading statements** in IPO offering documents[187](index=187&type=chunk) - Three shareholder derivative lawsuits (O'Halloran Action, Da Silva Action, Choi Action) have been filed, consolidated, and stayed, asserting **similar claims** against directors and officers[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - The company intends to **vigorously defend** against all legal claims and denies allegations of wrongdoing[187](index=187&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to previous filings - **No material changes** to risk factors were reported compared to previous filings[192](index=192&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1,285,336 shares** for **$3.0 million** under the 2025 Share Repurchase Program, with **$47.0 million** remaining authorized Share Repurchase Activity | Period | Total Shares Purchased | Weighted Average Price Paid Per Share | Shares Purchased as Part of Publicly Announced Programs | Maximum Dollar Value Remaining Under Program (in thousands) | | :----- | :--------------------- | :------------------------------------ | :------------------------------------------------------ | :---------------------------------------------------------- | | May 1 - 31, 2025 | 478,307 | $2.32 | 478,307 | $48,890 | | June 1 - 30, 2025 | 807,029 | $2.34 | 807,029 | $47,000 | | **Total (3 months)** | **1,285,336** | **$2.33** | **1,285,336** | **$47,000** | - The 2025 Share Repurchase Program, authorizing up to **$50.0 million**, had **$47.0 million** remaining as of June 30, 2025[194](index=194&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - **No defaults** upon senior securities were reported[195](index=195&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - **No mine safety disclosures** were reported[196](index=196&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No other information was reported - **No other information** was reported[197](index=197&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from executive officers and Inline XBRL documents - The report includes **certifications from the Principal Executive Officer and Principal Financial Officer** (Exhibits 31.1, 31.2, 32.1, 32.2) and **Inline XBRL documents**[198](index=198&type=chunk) [Signatures](index=52&type=section&id=Signatures) The report was signed by David Barrett (President and CEO) and Ryan Schaffer (CFO) on August 7, 2025 - The report was signed by **David Barrett** (President and CEO) and **Ryan Schaffer** (CFO) on August 7, 2025[203](index=203&type=chunk)

[Company Announcement & CEO Message](index=1&type=section&id=Company%20Announcement%20%26%20CEO%20Message) Expensify reported strong Q2 2025 results, highlighting increased interchange revenue, strategic brand investments, international expansion, and AI development [Q2 2025 Results Overview](index=1&type=section&id=Q2%202025%20Results%20Overview) Expensify announced strong Q2 2025 results, highlighting a significant increase in interchange revenue from the Expensify Card and positive free cash flow growth, despite a slight decrease in operating cash flow, and increased full-year free cash flow guidance Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Change YoY | | :------------------- | :-------- | :--------- | | Total Interchange | $5.3 million | +31% | | Operating Cash Flow | Down 4% | | | Free Cash Flow | Up 10% | | - Midpoint of full year 2025 FCF guidance increased by **$2.0 million** to **$19.0 million - $23.0 million**[5](index=5&type=chunk) [Strategic Initiatives & Brand Awareness](index=1&type=section&id=Strategic%20Initiatives%20%26%20Brand%20Awareness) The company's strategic investment in F1® The Movie yielded substantial brand exposure, leading to significant gains in brand awareness across target demographics, particularly among younger trendsetters - F1® The Movie provided Expensify brand exposure over **650 times** for more than **35 minutes**, reaching tens of millions of moviegoers[3](index=3&type=chunk) - Independent brand awareness surveys show **50% gains** in target demographics and **350% gains** in the 18-24 demographic[4](index=4&type=chunk) [International Expansion & Product Development](index=1&type=section&id=International%20Expansion%20%26%20Product%20Development) Expensify significantly strengthened its international offering by expanding the availability of the Expensify Card, adding support for numerous international banks, and enhancing language and billing options to facilitate global adoption - Expensify Card is expected to be available in the UK and most of the EU this month, and Canada is on the way, opening access to over **30 million businesses** in **18 new countries**[6](index=6&type=chunk) - Added support for third-party card feeds from over **10,000 additional banks**, including international banks in F1 viewing regions[6](index=6&type=chunk) - Now supports **10 total languages** and added support for EUR billing, complementing existing USD, GBP, AUD, and NZD options, with CAD billing forthcoming[6](index=6&type=chunk) - Customer migration from Classic to New Expensify continues, with New Expensify gaining capabilities and improving performance, including **235% faster page switching**[5](index=5&type=chunk) [AI Investment](index=1&type=section&id=AI%20Investment) The company is heavily focused on AI development, with plans to roll out new features in Q3 aimed at achieving 'financial AI supremacy' - Expensify is investing heavily in AI, with new features expected to roll out in Q3 to advance towards 'financial AI supremacy'[6](index=6&type=chunk) [Second Quarter 2025 Highlights](index=2&type=section&id=Second%20Quarter%202025%20Highlights) Expensify reported revenue growth and positive cash flow from operations, alongside a net loss increase and continued international expansion efforts [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Expensify reported a 7% increase in revenue year-over-year for Q2 2025, alongside positive cash flow from operations and free cash flow, but experienced an increased net loss and negative adjusted EBITDA Q2 2025 Financial Performance | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change YoY | | :---------------------- | :-------------------- | :-------------------- | :--------- | | Revenue | $35.8 | $33.3 | +7% | | Cash from Operations | $8.9 | | | | Free Cash Flow | $6.3 | | | | Net Loss | $(8.8) | $(2.8) | -214% | | Non-GAAP Net Loss | $(1.9) | | | | Adjusted EBITDA | $(1.4) | | | | Interchange from Card | $5.3 | | +31% | [Business Highlights](index=2&type=section&id=Business%20Highlights) Despite a decrease in paid members, Expensify saw significant growth in its travel segment and continued its international expansion efforts, while also executing a share repurchase program Q2 2025 Business Metrics | Metric | Q2 2025 | Change YoY | | :-------------------- | :-------- | :--------- | | Paid Members | 652,000 | -5% | | Expensify Travel Bookings | | +44% | | Shares Repurchased | 1,285,336 | | | Value of Repurchase | ~$3.0 million | | - International expansion included adding support for over **10,000 banks** worldwide and launching Euro-based billing[9](index=9&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) The company provided its Free Cash Flow guidance for FY2025 and detailed estimates for stock-based compensation expenses across various categories [Free Cash Flow Guidance](index=3&type=section&id=Free%20Cash%20Flow%20Guidance) Expensify provided its Free Cash Flow guidance for the fiscal year ending December 31, 2025, noting that a reconciliation to GAAP net cash provided by operating activities is not feasible without unreasonable efforts FY 2025 Free Cash Flow Guidance | Metric | Fiscal Year Ending Dec 31, 2025 | | :-------------- | :------------------------------ | | Free Cash Flow | $19.0 million to $23.0 million | - The company does not provide a reconciliation for free cash flow estimates on a forward-looking basis due to the unreasonable effort required to provide a meaningful or accurate calculation of net cash provided by operating activities and certain reconciling items[12](index=12&type=chunk) [Stock-Based Compensation Estimates](index=3&type=section&id=Stock-Based%20Compensation%20Estimates) The company provided estimates for stock-based compensation expenses across various cost categories for the next four fiscal quarters, primarily driven by pre-IPO RSU grants Estimated Stock-Based Compensation (in millions) | Category | Q3 2025 (Low-High) | Q4 2025 (Low-High) | Q1 2026 (Low-High) | Q2 2026 (Low-High) | | :----------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Cost of revenue, net | $2.4 - $3.2 | $2.2 - $3.0 | $2.1 - $2.9 | $2.1 - $2.9 | | Research and development | $1.7 - $2.3 | $1.6 - $2.2 | $1.6 - $2.2 | $1.5 - $2.1 | | General and administrative | $1.0 - $1.4 | $1.0 - $1.4 | $0.9 - $1.3 | $0.9 - $1.3 | | Sales and marketing | $0.8 - $1.0 | $0.8 - $1.0 | $0.8 - $1.0 | $0.7 - $0.9 | | **Total** | **$5.9 - $7.9** | **$5.6 - $7.6** | **$5.4 - $7.4** | **$5.2 - $7.2** | - Stock-based compensation is primarily driven by pre-IPO RSU grants issued to all employees, vesting quarterly over eight years with approximately four years remaining[13](index=13&type=chunk) [Additional Information](index=3&type=section&id=Additional%20Information) Expensify outlined its communication channels for material information, defined non-GAAP financial measures, and provided cautionary forward-looking statements [Availability of Information & Conference Call](index=3&type=section&id=Availability%20of%20Information%20%26%20Conference%20Call) Expensify communicates material information through SEC filings, press releases, public calls, webcasts, and its Investor Relations website, encouraging stakeholders to review the information shared there, and a video conference call was scheduled to discuss the results - Expensify routinely announces material information via SEC filings, press releases, public conference calls, webcasts, and its Investor Relations website (https://ir.expensify.com)[16](index=16&type=chunk) - A video call was scheduled for August 7, 2025, at 2:00 p.m. Pacific Time to discuss financial results and business highlights, with a replay available for three months[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Expensify uses non-GAAP financial measures like Adjusted EBITDA, non-GAAP net loss, and free cash flow to evaluate business performance and trends, providing definitions for these measures and cautioning that they should not be considered substitutes for GAAP measures - Non-GAAP financial measures (Adjusted EBITDA, non-GAAP net loss, free cash flow) are used to evaluate business, measure performance, identify trends, and inform strategic decisions[18](index=18&type=chunk)[19](index=19&type=chunk) - Adjusted EBITDA is defined as net loss excluding (benefit from) provision for income taxes, other (income) expenses, net, depreciation and amortization, and stock-based compensation expense[21](index=21&type=chunk) - Free cash flow is defined as net cash provided by operating activities excluding changes in settlement assets and liabilities, reduced by purchases of property and equipment and software development costs[22](index=22&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report includes forward-looking statements regarding future performance, strategy, and market conditions, which are subject to known and unknown risks and uncertainties, with factors such as inflation, interest rates, competition, geopolitical tensions, and the impact of AI potentially causing actual results to differ materially - Forward-looking statements are based on estimates and assumptions and involve known and unknown risks that are difficult to predict, potentially causing actual results to differ materially[24](index=24&type=chunk) - Key risk factors include inflation, borrowing costs, ability to attract and retain members, timing and success of new features, operating expenses, liquidity needs, geopolitical tensions, foreign currency fluctuations, and the impact of AI[24](index=24&type=chunk)[25](index=25&type=chunk) - The company cautions against undue reliance on forward-looking statements and does not undertake to update them publicly, except as required by law[25](index=25&type=chunk) [About Expensify](index=5&type=section&id=About%20Expensify) Expensify is a payments superapp simplifying money management for individuals and businesses, with contact information provided for inquiries [Company Profile](index=5&type=section&id=Company%20Profile) Expensify is a payments superapp designed to simplify money management for individuals and businesses, offering a suite of free features including corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking - Expensify is a payments superapp that helps individuals and businesses manage money across expenses, corporate cards, and bills[26](index=26&type=chunk) - Over **15 million people** use Expensify's free features, which include corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking[26](index=26&type=chunk) [Contact Information](index=5&type=section&id=Contact%20Information) Contact details for investor relations and press inquiries are provided - Investor Relations Contact: Nick Tooker, investors@expensify.com[27](index=27&type=chunk) - Press Contact: James Dean, press@expensify.com[27](index=27&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The financial statements present the company's balance sheets, statements of operations, cash flows, and reconciliations of GAAP to non-GAAP measures [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets and liabilities from December 31, 2024, to June 30, 2025, primarily driven by higher cash and cash equivalents and settlement assets and liabilities Condensed Consolidated Balance Sheets (in thousands) | Item | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $60,519 | $48,772 | | Settlement assets, net | $52,715 | $42,406 | | Total current assets | $152,282 | $136,876 | | Total assets | $187,138 | $173,680 | | Settlement liabilities | $37,093 | $28,845 | | Total current liabilities | $48,425 | $38,010 | | Total liabilities | $55,323 | $45,437 | | Total stockholders' equity | $131,815 | $128,243 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Expensify reported revenue growth but also an increased net loss, primarily due to higher sales and marketing expenses and stock-based compensation Condensed Consolidated Statements of Operations (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $35,764 | $33,288 | $71,838 | $66,823 | | Gross margin | $18,577 | $18,925 | $36,819 | $37,876 | | Sales and marketing | $14,346 | $3,072 | $17,888 | $6,456 | | Total operating expenses | $28,915 | $18,706 | $48,644 | $39,450 | | Net loss | $(8,788) | $(2,764) | $(11,957) | $(6,545) | | Basic and diluted net loss per share | $(0.10) | $(0.03) | $(0.13) | $(0.08) | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue, net | $2,770 | $2,886 | $5,809 | $5,818 | | Research and development | $2,018 | $3,144 | $4,421 | $5,894 | | General and administrative | $1,178 | $1,703 | $2,749 | $3,405 | | Sales and marketing | $961 | $648 | $1,938 | $788 | | **Total** | **$6,927** | **$8,381** | **$14,917** | **$15,905** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased, while net cash used in investing activities decreased significantly, and financing activities shifted from providing cash to using cash, primarily due to common stock repurchases Condensed Consolidated Statements of Cash Flows (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $13,721 | $12,788 | | Net cash used in investing activities | $(1,672) | $(4,867) | | Net cash (used in) provided by financing activities | $(455) | $1,816 | | Net increase in cash and cash equivalents and restricted cash | $11,594 | $9,737 | | Cash and cash equivalents and restricted cash, end of period | $102,428 | $106,395 | - Repurchase and retirement of common stock amounted to **$3,026 thousand** for the six months ended June 30, 2025[33](index=33&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) Expensify provided reconciliations for its non-GAAP financial measures, including Adjusted EBITDA, Non-GAAP Net Income, and Free Cash Flow, to their most directly comparable GAAP measures for the three months ended June 30, 2025 and 2024 Adjusted EBITDA Reconciliation (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(8,788) | $(2,764) | | (Benefit from) provision for income taxes | $(661) | $2,723 | | Other (income) expenses, net | $(889) | $260 | | Depreciation and amortization | $2,018 | $1,590 | | Stock-based compensation expense | $6,927 | $8,381 | | **Adjusted EBITDA** | **$(1,393)** | **$10,190** | | Adjusted EBITDA margin | (4)% | 31% | Non-GAAP Net Income Reconciliation (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(8,788) | $(2,764) | | Stock-based compensation expense | $6,927 | $8,381 | | **Non-GAAP net (loss) income** | **$(1,861)** | **$5,617** | | Non-GAAP net (loss) income margin | (5)% | 17% | Free Cash Flow Reconciliation (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $8,916 | $9,317 | | (Increase) decrease in Settlement assets | $(603) | $1,756 | | (Increase) decrease in Settlement liabilities | $(828) | $(3,317) | | Purchases of property and equipment | $(17) | $0 | | Software development costs | $(1,157) | $(2,038) | | **Free cash flow** | **$6,311** | **$5,718** | | Free cash flow margin | 18% | 17% |

Market Overview - Current market highs are expected to lead to increased dispersion in stock performance through the remainder of FY25, indicating that individual stock performances will vary widely [1] Analyst Background - Gary Alexander has extensive experience covering technology companies on Wall Street and working in Silicon Valley, providing insights into themes shaping the industry today [1] - He has been a contributor on Seeking Alpha since 2017 and has been quoted in various web publications, with his articles syndicated to popular trading apps like Robinhood [1]

Core Viewpoint - The research service "Asia Value & Moat Stocks" targets value investors looking for Asia-listed stocks that exhibit significant discrepancies between market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] Group 1: Investment Focus - The service emphasizes deep value balance sheet bargains, which include net cash stocks, net-nets, low price-to-book (P/B) stocks, and sum-of-the-parts discounts [1] - It also highlights wide moat stocks, which are characterized by strong earnings power at discounted prices, including high-quality businesses and hidden champions [1] Group 2: Market Emphasis - The primary focus of the investment ideas is on the Hong Kong market, providing a range of watch lists with monthly updates for investors [1]

Summary of Expensify Conference Call Company Overview - **Company Name**: Expensify - **Industry**: Expense Management - **Key Personnel**: Derek David Barrett, Founder and CEO - **Employee Count**: Approximately 120 employees - **Revenue**: Approximately $150 million, indicating a high revenue per employee ratio [7][13] Core Business Model and Market Opportunity - **Market Size**: There are around 300 million businesses globally, but less than 0.1% are currently using expense management software [10][11] - **Business Model**: Expensify employs a bottom-up approach where individual employees can download and use the app without company permission, leading to viral adoption [12][46] - **Profitability**: The company is profitable, generating free cash flow monthly and has paid off all debt [13][14] Product and Technology Differentiation - **Real-Time Chat Environment**: Expensify's platform operates in a real-time chat environment, enhancing user engagement and collaboration [5][6] - **Mobile Application**: Utilizes React Native for cross-platform functionality, allowing users to manage expenses seamlessly on mobile devices [18][20] - **AI Integration**: Features a concierge AI that assists users in real-time, enhancing the user experience and streamlining expense reporting [22][23] Product Expansion and Features - **Core Offerings**: Includes expense management, corporate cards, travel management, invoicing, and bill processing [34][40] - **Corporate Card Growth**: Achieved a 43% year-on-year growth in interchange fees from corporate card usage [38] - **Travel Management**: Integrated travel solutions are gaining traction, complementing the expense management services [39][40] Customer Acquisition Strategy - **Employee-Centric Branding**: Focuses on building a brand that resonates with employees, leading to organic growth through word-of-mouth [43][44] - **Marketing Campaigns**: Engaged in high-profile marketing campaigns, including a Super Bowl ad, to increase brand awareness [44][73] - **Cross-Selling**: Once companies adopt the expense management tool, Expensify introduces additional features like corporate cards and travel management organically [49][51] Competitive Landscape and Pricing Strategy - **Pricing Model**: Offers a competitive pricing structure at $5 per employee for basic services, with an upgraded plan at $9 for advanced features [55][58] - **Market Positioning**: Unlike competitors that require users to adopt their corporate cards, Expensify allows users to continue using existing cards, broadening its market appeal [63][65] - **Awareness and Lead Generation**: Emphasizes the importance of brand awareness over pricing as a key factor in customer acquisition [66] Financial Performance and Future Outlook - **Interchange Fee Growth**: Interchange fees have been growing rapidly, while subscription revenue has remained flat due to macroeconomic challenges affecting SMBs [67][68] - **Investment in Growth**: Plans to invest in marketing and product development to capture new customers and enhance existing offerings [88][91] - **Long-Term Vision**: Focused on sustainable growth and profitability, with a commitment to maintaining a strong balance sheet [90][92] Upcoming Marketing Initiatives - **F1 Movie Sponsorship**: Expensify is sponsoring an Apple movie featuring Brad Pitt, aiming to leverage this opportunity for significant brand exposure [76][80] - **Optimized User Experience**: The app will be enhanced to provide a seamless experience for new users attracted by the marketing campaign [82][83] Conclusion Expensify is positioned as a leader in the expense management industry with a unique business model that emphasizes employee engagement and viral growth. The company is focused on leveraging technology and strategic marketing to capture a larger share of the untapped market while maintaining profitability and sustainable growth.

Q1 2025 Earnings May 8th, 2025 Disclaimer All information included in this presentation is unaudited. FORWARDLOOKING STATEMENTS Forward-looking statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our strategy, future financial condition, future operations, future cash flow, projected costs, prospects, plans, objectives of management, expected m ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $36.1 million, representing an 8% year-on-year increase [3] - Average paid members decreased by 5% year-on-year to 657,000 [3] - Total interchange increased by 43% year-on-year to 5.1% [3] - Operating cash flow was $4.8 million, while free cash flow was $9.1 million, marking a 75% increase year-on-year and a 45% increase quarter-on-quarter [4][5] - GAAP net loss was $3.2 million, while non-GAAP net income was $4.8 million, and adjusted EBITDA was $8.4 million [4] Business Line Data and Key Metrics Changes - Expense by card grew to $5.1 million, a 43% increase year-on-year [8] - Travel expenses saw a 66% quarter-over-quarter increase, with customers adopting travel at twice the rate of the ExpenseMy card [8] Market Data and Key Metrics Changes - April paid members were 655,000, slightly down from Q1, indicating a less than 0.5% decrease [7][60] Company Strategy and Development Direction - The company is focusing on AI integration to enhance user experience, including features like conversational corrections and advanced policy violations [17][19] - A new simplified pricing model was introduced to attract lower-end market customers, with a flat rate of $5 per month per member [12][13] - The company is preparing for the upcoming Formula One movie release, which is expected to increase brand visibility and user sign-ups [25][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid macroeconomic challenges, citing a strong free cash flow position [34] - The impact of tariffs on customer behavior is being monitored, with customers currently in a "wait and see" mode [54][55] - The company anticipates that the benefits from the Formula One promotion will increase over time, particularly in Q3 [43] Other Important Information - The company has launched full Spanish support for its product, enhancing accessibility for Spanish-speaking users [9] - The management highlighted the importance of diversifying revenue streams beyond just paid members [39] Q&A Session Summary Question: Impact of macro and tariff issues on business - Management believes they are well-positioned to weather economic challenges, with a strong free cash flow of $9 million [34] Question: Disconnect between revenue growth and paid user decline - Management acknowledged the importance of paid members but emphasized diversification of revenue streams beyond subscriptions [39] Question: Timing of Formula One promotional impacts - Management indicated that significant benefits from the Formula One promotion are expected to materialize more in Q3 than in Q2 [43] Question: Customer vertical exposure to tariff headwinds - Management noted that tracking customer exposure to tariffs is challenging, with customers currently in a cautious holding pattern [54][55] Question: Accounting treatment for Formula One movie expenses - Management explained that while cash flow impacts have been felt, the expense recognition will occur upon the movie's release [61]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $36.1 million, representing an 8% year-on-year increase [3] - Average paid members decreased by 5% year-on-year to 657,000 [3] - Total interchange increased by 43% year-on-year to 5.1% [3] - Operating cash flow was $4.8 million, while free cash flow was $9.1 million, marking a 75% increase year-on-year and a 45% increase quarter-on-quarter [4][5] - GAAP net loss was $3.2 million, while non-GAAP net income was $4.8 million, and adjusted EBITDA was $8.4 million [4] Business Line Data and Key Metrics Changes - Expense by card grew to $5.1 million, a 43% increase year-on-year [8] - Travel expenses saw a 66% quarter-over-quarter increase, with customers adopting travel at twice the rate of the ExpenseMy card [8] Market Data and Key Metrics Changes - April paid members were 655,000, slightly down from Q1, indicating a less than 0.5% decrease [7][60] Company Strategy and Development Direction - The company is focusing on AI integration to enhance user experience, including features like conversational corrections and advanced policy violations [17][19] - A new simplified pricing model was introduced to attract lower-end market customers, with a flat rate of $5 per month per member [12][13] - The company is preparing for the upcoming Formula One movie promotion, which is expected to increase visibility and user sign-ups [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid economic challenges, citing a strong free cash flow position [34] - The impact of macroeconomic factors and tariffs is being monitored, with customers currently in a cautious holding pattern [54][55] - The company anticipates that the benefits from the Formula One promotion will be more pronounced in Q3 than in Q2 [43] Other Important Information - The company has launched full Spanish support for its product, enhancing accessibility for Spanish-speaking users [9] - The management highlighted the importance of diversifying revenue streams beyond just paid members [39] Q&A Session Summary Question: Impact of macro and tariff issues on business - Management believes they are well-positioned to weather economic challenges, with a strong free cash flow of $9 million [34] Question: Disconnect between revenue growth and paid user decline - Management acknowledged the importance of paid members but emphasized diversification of revenue streams beyond subscriptions [39] Question: Timing of Formula One promotion impacts - Management indicated that while Q1 did not show significant benefits, they expect increased impact in Q3 as promotional activities ramp up [43] Question: Customer vertical exposure to tariffs - Management noted challenges in tracking customer exposure to tariffs but observed a cautious approach from customers in various sectors [54][55] Question: Accounting impact of the Formula One movie - Management explained that while cash flow impacts have been felt, the expense recognition will occur upon the movie's release, leading to a significant expense in the income statement [61]