Expensify: Staying Bullish On Good Performance And Favorable Prospects

Core Viewpoint - Expensify, Inc. (NASDAQ:EXFY) has shown strong financial performance in Q2 2024, with significant EBITDA and EPS beats, leading to a bullish outlook for the stock [1][2][8]. Financial Performance - In Q2 2024, Expensify's non-GAAP adjusted EBITDA increased by 373% year-over-year to $10.2 million, while normalized EPS improved from a loss of $0.01 in Q2 2023 to a profit of $0.06 in Q2 2024 [2]. - The company's Q2 2024 normalized EBITDA and non-GAAP adjusted EPS exceeded Wall Street's consensus forecasts by 60% and 62%, respectively [2]. - Full-year free cash flow guidance for fiscal 2024 was raised by 29% from $12.0 million to $15.5 million, attributed to effective cost management [2]. Revenue Performance - Expensify's revenue for Q2 2024 declined by 14% year-over-year to $33.3 million, missing analysts' expectations by 3% [4]. - Despite the revenue decline, the company noted a marginal sequential contraction of 0.7% quarter-over-quarter, indicating stabilization [4]. - Future revenue growth is anticipated from the launch of the New Expensify superapp and Expensify Travel, expected to generate new revenue streams starting in Q3 2024 [3][4][6]. Growth Drivers - The New Expensify superapp aims to cater to both personal and business financial needs, targeting very small businesses (VSBs) and small-to-medium-sized businesses (SMBs) [5]. - Expensify Travel is positioned as a corporate travel booking and management platform, which is expected to attract new customers who previously found the lack of travel services a dealbreaker [6]. - Analysts project a narrowing of revenue contraction from -14% in Q2 2024 to -4% in Q3 2024, with a return to positive growth of 3% in Q4 2024 [6]. Valuation - Expensify's stock is currently trading at a Price-to-Earnings Growth (PEG) multiple of 0.61, based on a normalized P/E ratio of 10.1 times and an estimated EPS CAGR of 16.6% for FY 2024-2026 [9].