Financial Data and Key Metrics - Revenue for Q3 2023 was 36.5million,a143.1 million, with the Expensify card being a significant growth driver [54][50] - Paid members stood at 719,000, with a notable uptick in October, indicating some recovery in subscription growth [54][59] - GAAP net loss was 17million,whilenon−GAAPnetlosswas6.7 million, and adjusted EBITDA was negative 3.5million[99]BusinessLineDataandKeyMetrics−TheExpensifycardcontinuestogrow,withnetinterchangebeingakeyrevenuedriver,expectedtotransitiontoanewrevenuetreatmentbytheendof2024[55][57]−Thecompanyisfocusingonimprovingtheconversionoffreetrialstopaidadoption,whichisalreadybest−in−classforSaaSproducts[64]−Theintroductionofnewfeatureslikeinvoicing,billpay,andpayrollisaimedatincreasingcustomerretentionandscalingusage[36]MarketDataandKeyMetrics−Thecompanyisseeinggrowthininternationalmarkets,particularlyintheUK,Europe,Canada,andAustralia,wheretaxcapabilitiesareintegrated[8]−Thesmallbusinesssegment(1−250employees)remainsakeyfocus,withthemajorityofendusersworkingatsmallcompanies[28][29]−ThecompanyisleveragingdigitaladvertisingandSEOtocapitalizeoninboundmomentum,especiallyfortheupcomingExpensify2.0launch[73]CompanyStrategyandIndustryCompetition−Thecompanyistransitioningtoasubscription−driven,bottom−upacquisitionmodel,whichisbettersuitedforthesmallbusinessmarket[27][29]−Expensify2.0isbeingdevelopedtoengageendusersmoreeffectively,withafocusonactivatingfreeuserssoonerandimprovingtheonboardingexperience[17][44]−Thecompanyissunsettingitsoutboundsalesprogram,focusinginsteadondigitaladvertisingandonboardingspecialiststoimproveROI[48][152]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−ManagementnotedachallengingenvironmentforSMBcustomersduetoeconomicheadwindsandhighinterestrates,whichhasimpacteduseractivity[58][81]−Thecompanyexpectstobefreecashflowpositivein2024andbeyond,drivenbycostreductionsandthetransitiontothenewExpensifycardprogram[84][60]−Managementisoptimisticaboutthefuture,citinggreenshootsinthemarketandtheupcominglaunchofExpensify2.0askeygrowthdrivers[86][87]OtherImportantInformation−Thecompanyhasreduceditsdebtby36 million, which is expected to save $3.8 million in fiscal year 2024 [103] - Expensify 2.0 is expected to launch soon, with a focus on engaging end users through new viral loops and collaboration features [37][113] - The company is working on improving gross margins by reducing COGS in 2024, although no specific target has been provided [112] Q&A Session Summary Question: What is driving the optimism for "clear skies emerging"? - Management cited the upcoming revenue benefit from the Expensify card and the near-launch of Expensify 2.0 as key reasons for optimism [86][87] Question: What areas will see expense reductions in 2024? - Expense reductions will focus on S&M, G&A, and R&D, with a shift towards more efficient digital advertising and community-driven development [89][108] Question: How is the company addressing the decline in activity-based users? - The company is focusing on increasing subscriptions and improving the conversion of free trials to paid adoption, while also introducing new features to retain customers [91][92] Question: What is left to bring Expensify 2.0 to market? - The company is iteratively launching features at conferences to gather feedback, with the full viral adoption flow expected to launch soon [94][113] Question: How is the competitive environment shifting? - Competitors are starting to introduce paid plans, which is seen as a positive shift for Expensify, as it validates the company's business model [119][132] Question: What is the timeline for the transition to the new Expensify card program? - The transition is expected to start in Q4 2023 and be completed by the end of 2024, with a phased approach to avoid disrupting customers [57][142] Question: How is the company addressing churn? - The company is focusing on retaining customers by improving the onboarding experience and introducing new use cases to increase engagement [167][170] Question: What is the strategy for sunsetting the old Expensify platform? - The company will allow customers to switch between the old and new platforms, gathering feedback to improve the new product before fully sunsetting the old one [151][163]