Expensify(US:EXFY)2023-05-08 16:00Financial Performance - For the quarter ended March 31, 2023, revenue was $40.1 million, a decrease of $0.3 million or 1% compared to $40.37 million in the same period in 2022[118]. - The net loss for the quarter was $5.945 million, compared to a net loss of $7.376 million in the same period in 2022[116]. - The net loss margin improved to 15% for the three months ended March 31, 2023, compared to 18% in the same period in 2022[116]. - Adjusted EBITDA decreased to $8.7 million for the three months ended March 31, 2023, from $11.0 million in the same period in 2022, with the adjusted EBITDA margin at 22% compared to 27%[133]. - Non-GAAP net income was $4.1 million for the three months ended March 31, 2023, down from $7.3 million in the same period in 2022, resulting in a non-GAAP net income margin of 10% compared to 18%[135]. Expenses - The cost of revenue, net increased by $1.6 million or 12% to $15.775 million for the three months ended March 31, 2023, primarily due to increased outsourcing activities and payment processing fees[119]. - Gross margin decreased to 61% for the three months ended March 31, 2023, down from 64% in the same period in 2022, primarily due to increased cost of revenue[120]. - Research and development expenses increased by $1.7 million or 46% to $5.418 million for the three months ended March 31, 2023, driven by increased employee and external contributor time on project initiatives[121]. - General and administrative expenses decreased by $1.577 million or 11% to $12.429 million for the three months ended March 31, 2023, due to reduced employee time allocated to administrative functions[122]. - Sales and marketing expenses decreased by $4.189 million or 31% to $9.183 million for the three months ended March 31, 2023, primarily due to reduced advertising and marketing event spending[123]. Membership and Transactions - The average number of paid members was 747,000 across 47,800 companies and over 200 countries and territories as of March 31, 2023[102]. - Average number of paid members increased to 747 thousand for the three months ended March 31, 2023, from 706 thousand in the same period in 2022, reflecting a growth of 5.8%[129]. - Expensify processed and automated over 1.4 billion expense transactions on its platform as of March 31, 2023[102]. Cash and Debt - Net cash provided by operating activities was $7.6 million for the three months ended March 31, 2023, a decrease from $11.2 million in the same period in 2022[140]. - As of March 31, 2023, the company had $111.2 million in cash and cash equivalents and $67.1 million in outstanding indebtedness[137]. - The outstanding balances of the 2021 Amended Term Loan and revolving line of credit were $44.3 million and $15.0 million, respectively, as of March 31, 2023[147]. - The company believes existing cash resources will be sufficient to finance operations and growth strategy for the next 12 months[138]. - As of March 31, 2023, the Company was not in compliance with all debt covenants, specifically regarding stock repurchases and account maintenance, but expects to be compliant by June 30, 2023[151]. Taxation - Provision for income taxes was $1.8 million for the three months ended March 31, 2023, up from $1.6 million in the same period in 2022, representing a 12% increase[125]. - The effective income tax rate for the three months ended March 31, 2023, was (44.3)%, compared to (28.4)% for the same period in 2022[126]. Compliance and Governance - The Company was deemed a large accelerated filer effective December 31, 2022, and must comply with all financial disclosure and governance requirements applicable to large accelerated filers[160]. - There have been no material changes in the Company's contractual obligations and commitments since the 2022 Annual Report[152]. - The Company has not entered into any off-balance sheet financing arrangements or relationships with unconsolidated entities during the periods presented[155]. - There have been no material changes to the Company's critical accounting policies and estimates compared to those described in the 2022 Annual Report[157]. - There have been no material changes in the Company's market risk from the disclosures included in the 2022 Annual Report[161].