Expensify(US:EXFY)2022-05-15 16:00Membership and Revenue Growth - As of March 31, 2022, Expensify had 706,000 paid members, an increase of 11.5% from 633,000 paid members in the same quarter of 2021[128] - Revenue for the three months ended March 31, 2022, was $40.37 million, an increase of $10.65 million or 36% compared to $29.72 million in the same period in 2021[156] - The Expensify Interchange Amount increased to $1,220,000 in the three months ended March 31, 2022, from $488,000 in the same period of 2021[141] Financial Performance - Adjusted EBITDA for the three months ended March 31, 2022, was $10,992,000, with an adjusted EBITDA margin of 27%, down from $13,422,000 and 45% in the same quarter of 2021[131] - Non-GAAP net income for the three months ended March 31, 2022, was $7,291,000, representing a margin of 18%, compared to $8,753,000 and 29% in the same quarter of 2021[133] - Gross margin decreased to 64% for the three months ended March 31, 2022, down from 74% in the same period in 2021[158] Expenses - Cost of revenue, net increased by $6.5 million or 85% to $14.13 million for the three months ended March 31, 2022, primarily due to stock-based compensation costs of $4.9 million[157] - Research and development expenses rose by $2.6 million or 237% to $3.7 million for the three months ended March 31, 2022, mainly due to stock-based compensation costs of $2.7 million[159] - Sales and marketing expenses increased by $10.3 million or 335% to $13.37 million for the three months ended March 31, 2022, driven by higher advertising spend and stock-based compensation costs of $2.1 million[161] - General and administrative expenses grew by $7.6 million or 120% to $14.01 million for the three months ended March 31, 2022, largely due to increased compensation and stock-based compensation costs of $5.0 million[162] Net Loss and Earnings Per Share - Net loss attributable to Class A, LT10, and LT50 common stockholders was $(7.38) million for the three months ended March 31, 2022, compared to a net income of $2.50 million in the same period in 2021[154] - Basic and diluted net loss per share attributable to Class A, LT10, and LT50 common stockholders was $(0.09) for the three months ended March 31, 2022, compared to $0.08 and $0.06 in the same period in 2021[154] Cash Flow and Capital Resources - Cash provided by operating activities increased to $11.2 million for the three months ended March 31, 2022, up from $9.9 million in the same period in 2021[169] - Cash used in investing activities decreased to $0.7 million for the three months ended March 31, 2022, compared to $0.953 million in the same period in 2021[173] - Cash provided by financing activities was $0.2 million for the three months ended March 31, 2022, an increase from a cash outflow of $1.083 million in the same period in 2021[175] - As of March 31, 2022, the company had $101.1 million in cash and cash equivalents and $67.7 million in outstanding indebtedness[167] Tax and Compliance - The provision for income taxes was $1.6 million for the three months ended March 31, 2022, a decrease of 41% from $2.8 million in the same period in 2021[165] - The effective income tax rate for the three months ended March 31, 2022, was (28.4)%, compared to 25.6% in 2021, primarily due to changes in valuation allowance[166] - The company is in compliance with all debt covenants as of March 31, 2022[184] Market and Economic Factors - The impact of COVID-19 has led to a temporary decline in business travel, affecting expense-related activities on the platform[120] - Inflation has not materially affected the company's operations, but significant inflationary pressures could harm financial condition[216] Stock and Valuation - The company determined the fair value of its common stock prior to the IPO by considering independent third-party valuations and expected price ranges from bankers[198] - The enterprise value was estimated using the income approach and market approach, focusing on future cash flows and comparisons with peer companies[200][201] - Stock-based compensation is accounted for under GAAP, with expenses recognized over the service period of the awards[204] Risk Factors - Interest rate risk is present due to borrowings, but a 10% change in interest rates would not materially affect financial statements[214] - A hypothetical 10% change in the U.S. dollar's value relative to foreign currencies is not expected to materially impact cash flows[213]