Expensify(EXFY) - 2025 Q2 - Quarterly Results

Company Announcement & CEO Message Expensify reported strong Q2 2025 results, highlighting increased interchange revenue, strategic brand investments, international expansion, and AI development Q2 2025 Results Overview 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] Strategic Initiatives & Brand Awareness 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] - Independent brand awareness surveys show 50% gains in target demographics and 350% gains in the 18-24 demographic[4] International Expansion & Product Development 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] - Added support for third-party card feeds from over 10,000 additional banks, including international banks in F1 viewing regions[6] - Now supports 10 total languages and added support for EUR billing, complementing existing USD, GBP, AUD, and NZD options, with CAD billing forthcoming[6] - Customer migration from Classic to New Expensify continues, with New Expensify gaining capabilities and improving performance, including 235% faster page switching[5] AI Investment 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] Second Quarter 2025 Highlights Expensify reported revenue growth and positive cash flow from operations, alongside a net loss increase and continued international expansion efforts Financial Highlights 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 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] Financial Outlook 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 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] Stock-Based Compensation Estimates 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] Additional Information Expensify outlined its communication channels for material information, defined non-GAAP financial measures, and provided cautionary forward-looking statements Availability of Information & Conference Call 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] Non-GAAP Financial Measures 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][19] - 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] - 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] Forward-Looking Statements 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] - 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][25] - The company cautions against undue reliance on forward-looking statements and does not undertake to update them publicly, except as required by law[25] About Expensify Expensify is a payments superapp simplifying money management for individuals and businesses, with contact information provided for inquiries Company Profile 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] - 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] Contact Information Contact details for investor relations and press inquiries are provided - Investor Relations Contact: Nick Tooker, investors@expensify.com[27] - Press Contact: James Dean, press@expensify.com[27] Financial Statements 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 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 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 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] Reconciliation of GAAP to Non-GAAP Financial Measures 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% |