Le Lézard
Classified in: Science and technology, Business
Subjects: EARNINGS, Conference Call, Webcast

Expensify Announces Q1 2024 Results


Expensify, Inc. (Nasdaq: EXFY), a payments superapp that helps individuals and businesses around the world simplify the way they manage money across expenses, corporate cards and bills, today released a letter to shareholders from Founder and CEO David Barrett alongside results for its quarter ended March 31, 2024.

A Message From Our Founder

Q1'24 was a great start to the year. We are back to strong Operating cash flow and Free cash flow profitability, producing our best quarterly Free cash flow since Q1 of last year, and we are also increasing our full-year guidance.

Though seasonally soft in terms of revenue, interchange from the Expensify Card continued growing by leaps and bounds: up 13% month on month in March alone. Additionally, while some existing customers did shed internal employees (thereby reducing our active seat count), our strong margins continue to fortify our cash position to help us ride out these near term headwinds.

Next, we announced our highly anticipated corporate travel service, which already has a sizable backlog of interest and will be cross sold through our existing account manager and sales teams. Expensify Travel is designed to scale up to the very top of the market, and is the most commonly requested feature from our midmarket and enterprise customers.

Finally ? and most exciting of all ? we have made outstanding progress in developing New Expensify. Not only have we executed some extremely delicate back-end upgrades with minimal downtime, but we have completed the core pieces of the "critical viral path". This is the uniquely Expensify "superapp experience" that we believe will enable us to seamlessly convert viral consumer signups into highly qualified SMB leads in the "untapped 99%" of the market, that then grow into reliable midmarket profit centers.

I couldn't be more proud of our product development team in crossing this key watershed, enabling us to move past core feature development to focus on rock solid stability, glassy-smooth performance, and highly optimized conversion flows.

It's been a long journey. But by this time next quarter, New Expensify and Expensify Travel are both expected to be producing new incremental revenue, as well as helping retain and expand existing customers for years to come. It takes a lot of work to make something look this simple, and I can't wait to show you on the earnings call (or visit exfy.com/roadmap to see it yourself)!

-david
Founder and CEO of Expensify

First Quarter 2024 Highlights

Financial:

Impact of Cost Cutting Measures

Business:

Financial Outlook

Expensify's outlook statements are based on current estimates, expectations and assumptions and are not a guarantee of future performance. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below. There can be no assurance that the Company will achieve the results expressed by this guidance.

Free Cash Flow

Expensify estimates Free cash flow of $11.0 million to $13.0 million for the fiscal year ending December 31, 2024.

The Company does not provide a reconciliation for free cash flow estimates on a forward-looking basis because it is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of net cash provided by operating activities and certain reconciling items on a forward-looking basis, which could be significant to the Company's results.

Stock Based Compensation

An estimate of expected stock-based compensation for the next four fiscal quarters is as follows, which is driven primarily by the pre-IPO grant of RSUs issued to all employees (which vest quarterly over eight years with approximately five years remaining).

Est. stock-based compensation (millions)

 

 

Q2 2024

 

Q3 2024

 

Q4 2024

 

Q1 2025

 

Low

 

High

 

Low

 

High

 

Low

 

High

 

Low

 

High

Cost of revenue, net

$

2.8

 

$

3.5

 

$

2.7

 

$

3.4

 

$

2.6

 

$

3.3

 

$

2.4

 

$

3.1

Research and development

 

2.9

 

 

 

3.6

 

 

 

2.9

 

 

 

3.6

 

 

 

2.8

 

 

 

3.5

 

 

 

2.5

 

 

 

3.2

 

General and administrative

 

1.7

 

 

 

2.1

 

 

 

1.6

 

 

 

2.0

 

 

 

1.6

 

 

 

2.0

 

 

 

1.4

 

 

 

1.8

 

Sales and marketing

 

0.5

 

 

 

0.7

 

 

 

0.5

 

 

 

0.7

 

 

 

0.5

 

 

 

0.7

 

 

 

0.5

 

 

 

0.7

 

Total

$

7.9

 

 

$

9.9

 

 

$

7.7

 

 

$

9.7

 

 

$

7.5

 

 

$

9.5

 

 

$

6.8

 

 

$

8.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Availability of Information on Expensify's Website

Investors and others should note that Expensify routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Expensify Investor Relations website at https://ir.expensify.com. While not all of the information that the Company posts to its Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in Expensify to review the information that it shares on its Investor Relations website.

Conference Call

Expensify will host a video call to discuss the financial results and business highlights at 2:00 p.m. Pacific Time today. An investor presentation and the video call information is available on Expensify's Investor Relations website at https://ir.expensify.com. A replay of the call will be available on the site for three months.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), we provide certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, and free cash flow.

We believe our non-GAAP financial measures are useful in evaluating our business, measuring our performance, identifying trends affecting our business, formulating business plans and making strategic decisions. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP is at the end of this press release.

Adjusted EBITDA. We define adjusted EBITDA as net loss from operations excluding provision for income taxes, interest and other expenses, net, depreciation and amortization, and stock-based compensation.

Non-GAAP net income. We define non-GAAP net income as net loss from operations excluding stock-based compensation.

Free cash flow. We define Free cash flow as net cash provided by operating activities excluding changes in settlement assets and settlement liabilities, which represent funds held for customers and customer funds in transit, respectively, reduced by the purchases of property and equipment and software development costs.

The tables at the end of the Condensed Consolidated Financial Statements provide reconciliations to the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.

Forward-Looking Statements

Forward-looking statements in this press release, or made during the earnings call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our strategy, future financial condition, future operations, future cash flow, projected costs, prospects, plans, objectives of management and expected market growth, product developments and their potential impact and our stock-based compensation estimates and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "goal," "ambition," "objective," "seeks," "outlook," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: our expectations regarding our financial performance and future operating performance; our ability to attract and retain members, expand usage of our platform, sell subscriptions to our platform and convert individuals and organizations into paying customers; the timing and success of new features, integrations, capabilities and enhancements by us, or by competitors to their products, or any other changes in the competitive landscape of our market; the amount and timing of operating expenses and capital expenditures that we may incur to maintain and expand our business and operations to remain competitive; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our ability to make required payments under and to comply with the various requirements of our current and future indebtedness; our cash flows, the prevailing stock prices, general economic and market conditions and other considerations that could affect the specific timing, price and size of repurchases under our stock repurchase program or our ability to fund any stock repurchases; geopolitical tensions, including the war in Ukraine and the conflict in Israel, Gaza and surrounding areas; the impact on inflation on us and our members; our borrowing costs have and may continue to increase as a result of increases in interest rates; our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates; the expenses associated with being a public company; the size of our addressable markets, market share and market trends; anticipated trends, developments and challenges in our industry, business and the highly competitive markets in which we operate; our expectations regarding our income tax liabilities and the adequacy of our reserves; our ability to effectively manage our growth and expand our infrastructure and maintain our corporate culture; our ability to identify, recruit and retain skilled personnel, including key members of senior management; the safety, affordability and convenience of our platform and our offerings; our ability to successfully defend litigation brought against us; our ability to successfully identify, manage and integrate any existing and potential acquisitions of businesses, talent, technologies or intellectual property; general economic conditions in either domestic or international markets; our protections against security breaches, technical difficulties, or interruptions to our platform; our ability to maintain, protect and enhance our intellectual property; and other risks discussed in our filings with the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

About Expensify

Expensify is a payments superapp that helps individuals and businesses around the world simplify the way they manage money. More than 12 million people use Expensify's free features, which include corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking in one app. All free. Whether you own a small business, manage a team, or close the books for your clients, Expensify makes it easy so you have more time to focus on what really matters.

Expensify, Inc.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except share data)

 

 

As of March 31,

 

As of December 31,

 

 

2024

 

 

 

2023

 

Assets

 

 

 

Cash and cash equivalents

$

49,340

 

 

$

47,510

 

Accounts receivable, net

 

13,557

 

 

 

13,834

 

Settlement assets, net

 

48,513

 

 

 

39,261

 

Prepaid expenses

 

4,379

 

 

 

5,649

 

Other current assets

 

27,399

 

 

 

30,978

 

Total current assets

 

143,188

 

 

 

137,232

 

Capitalized software, net

 

15,107

 

 

 

12,494

 

Property and equipment, net

 

14,138

 

 

 

14,372

 

Lease right-of-use assets

 

5,954

 

 

 

6,435

 

Deferred tax assets, net

 

466

 

 

 

457

 

Other assets

 

5,918

 

 

 

5,794

 

Total assets

$

184,771

 

 

$

176,784

 

Liabilities and stockholders' equity

 

 

 

Accounts payable

$

1,373

 

 

$

1,425

 

Accrued expenses and other liabilities

 

10,326

 

 

 

9,390

 

Borrowings under line of credit

 

15,000

 

 

 

15,000

 

Current portion of long-term debt, net of original issue discount and debt issuance costs

 

7,624

 

 

 

7,655

 

Lease liabilities, current

 

436

 

 

 

432

 

Settlement liabilities

 

35,560

 

 

 

33,990

 

Total current liabilities

 

70,319

 

 

 

67,892

 

Lease liabilities, non-current

 

6,155

 

 

 

6,467

 

Other liabilities

 

1,787

 

 

 

1,681

 

Total liabilities

 

78,261

 

 

 

76,040

 

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Preferred stock, par value $0.0001; 10,000,000 shares of preferred stock authorized as of March 31, 2024 and December 31, 2023; no shares of preferred stock issued and outstanding as of March 31, 2024 and December 31, 2023

 

?

 

 

 

?

 

Common stock, par value $0.0001; 1,000,000,000 shares of Class A common stock authorized as of March 31, 2024 and December 31, 2023; 71,755,477 and 70,569,815 shares of Class A common stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively; 24,994,705 and 24,994,989 shares of LT10 common stock authorized as of March 31, 2024 and December 31, 2023, respectively; 7,333,335 and 7,333,619 shares of LT10 common stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively; 24,969,634 and 24,998,941 shares of LT50 common stock authorized as of March 31, 2024 and December 31, 2023, respectively; 7,395,695 and 7,321,894 shares of LT50 common stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

9

 

 

 

8

 

Additional paid-in capital

 

251,055

 

 

 

241,509

 

Accumulated deficit

 

(144,554

)

 

 

(140,773

)

Total stockholders' equity

 

106,510

 

 

 

100,744

 

Total liabilities and stockholders' equity

$

184,771

 

 

$

176,784

 

 

 

 

 

Expensify, Inc.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except share and per share data)

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Revenue

$

33,535

 

 

$

40,101

 

Cost of revenue, net (1)

 

14,584

 

 

 

15,775

 

Gross margin

 

18,951

 

 

 

24,326

 

Operating expenses:

 

 

 

Research and development (1)

 

5,929

 

 

 

5,418

 

General and administrative (1)

 

11,431

 

 

 

12,429

 

Sales and marketing (1)

 

3,384

 

 

 

9,183

 

Total operating expenses

 

20,744

 

 

 

27,030

 

Loss from operations

 

(1,793

)

 

 

(2,704

)

Interest and other expenses, net

 

(954

)

 

 

(1,416

)

Loss before income taxes

 

(2,747

)

 

 

(4,120

)

Provision for income taxes

 

(1,034

)

 

 

(1,825

)

Net loss

$

(3,781

)

 

$

(5,945

)

Net loss per share:

 

 

 

Basic and diluted

$

(0.04

)

 

$

(0.07

)

Weighted average shares of common stock used to compute net loss per share:

 

 

 

Basic and diluted

 

85,141,411

 

 

 

81,768,429

 

 

 

 

 

(1

 

Includes stock-based compensation expense as follows:

   
   

 

Three Months Ended March 31,

   
   

 

 

2024

 

 

 

2023

 

   
   

Cost of revenue, net

$

2,932

 

$

3,306

   
   

Research and development

 

2,749

 

 

 

2,206

 

   
   

General and administrative

 

1,703

 

 

 

2,644

 

   
   

Sales and marketing

 

140

 

 

 

1,848

 

   
   

Total stock-based compensation expense

$

7,524

 

 

$

10,004

 

   
   

 

 

 

 

   
 

Expensify, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net loss

$

(3,781

)

 

$

(5,945

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

1,423

 

 

 

1,413

 

Reduction of operating lease right-of-use assets

 

136

 

 

 

181

 

Loss on impairment, receivables and sale or disposal of equipment

 

337

 

 

 

146

 

Stock-based compensation expense

 

7,524

 

 

 

10,004

 

Amortization of original issue discount and debt issuance costs

 

11

 

 

 

11

 

Deferred tax assets

 

(9

)

 

 

(30

)

Changes in assets and liabilities:

 

 

 

Accounts receivable, net

 

139

 

 

 

707

 

Settlement assets, net

 

(6,120

)

 

 

(2,683

)

Prepaid expenses

 

1,270

 

 

 

1,414

 

Other current assets

 

171

 

 

 

406

 

Other assets

 

(124

)

 

 

8

 

Accounts payable

 

(260

)

 

 

944

 

Accrued expenses and other liabilities

 

1,044

 

 

 

1,947

 

Operating lease liabilities

 

34

 

 

 

(206

)

Settlement liabilities

 

1,570

 

 

 

(738

)

Other liabilities

 

106

 

 

 

63

 

Net cash provided by operating activities

 

3,471

 

 

 

7,642

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

?

 

 

 

(28

)

Software development costs

 

(2,829

)

 

 

(870

)

Net cash used in investing activities

 

(2,829

)

 

 

(898

)

Cash flows from financing activities:

 

 

 

Principal payments of finance leases

 

(31

)

 

 

(201

)

Principal payments of outstanding debt

 

(37

)

 

 

(150

)

Payments for debt issuance costs

 

(8

)

 

 

?

 

Repurchases of early exercised stock options

 

(32

)

 

 

(7

)

Proceeds from common stock purchased under Matching Plan

 

914

 

 

 

1,099

 

Proceeds from issuance of common stock on exercise of stock options

 

39

 

 

 

66

 

Payments for employee taxes withheld from stock-based awards

 

?

 

 

 

(666

)

Net cash provided by financing activities

 

845

 

 

 

141

 

Net increase in cash and cash equivalents and restricted cash

 

1,487

 

 

 

6,885

 

Cash and cash equivalents and restricted cash, beginning of period

 

96,658

 

 

 

147,710

 

Cash and cash equivalents and restricted cash, end of period

$

98,145

 

 

$

154,595

 

Supplemental disclosure of cash flow information:

 

 

 

Cash paid for interest

$

454

 

 

$

1,409

 

Cash paid for income taxes

$

1,164

 

 

$

351

 

Noncash investing and financing items:

 

 

 

Stock-based compensation capitalized as software development costs

$

915

 

 

$

657

 

Purchases of property and equipment and capitalized software in accounts payable and accrued expenses

$

223

 

 

$

?

 

Right-of-use assets acquired through operating leases

$

?

 

 

$

145

 

Reconciliation of cash and cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets

 

 

 

Cash and cash equivalents

$

49,340

 

 

$

111,232

 

Restricted cash included in other current assets

 

24,267

 

 

 

19,013

 

Restricted cash included in settlement assets, net

 

24,538

 

 

 

24,350

 

Total cash, cash equivalents and restricted cash

$

98,145

 

 

$

154,595

 

 

 

 

 

 

 

 

 

Expensify, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands, except percentages)

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

Three Months Ended March 31,

 

Three Months Ended

December 31,

 

 

2024

 

 

 

2023

 

 

 

2023

 

Net loss

$

(3,781

)

 

$

(5,945

)

 

$

(7,204

)

Net loss margin

 

(11

)%

 

 

(15

)%

 

 

(20

)%

Add:

 

 

 

 

 

Provision for income taxes

 

1,034

 

 

 

1,825

 

 

 

1,049

 

Interest and other expenses, net

 

954

 

 

 

1,416

 

 

 

169

 

Depreciation and amortization

 

1,383

 

 

 

1,413

 

 

 

1,240

 

Stock-based compensation

 

7,524

 

 

 

10,004

 

 

 

10,600

 

Adjusted EBITDA

$

7,114

 

 

$

8,713

 

 

$

5,854

 

Adjusted EBITDA margin

 

21

%

 

 

22

%

 

 

17

%

 

 

 

 

 

 

Non-GAAP Net Income and Non-GAAP Net Income Margin

 

Three Months Ended March 31,

 

Three Months Ended

December 31,

 

2024

 

 

 

2023

 

 

 

2023

 

Net loss

$

(3,781

)

 

$

(5,945

)

 

$

(7,204

)

Net loss margin

 

(11

)%

 

 

(15

)%

 

 

(20

)%

Add:

 

 

 

 

 

Stock-based compensation

 

7,524

 

 

 

10,004

 

 

 

10,600

 

Non-GAAP net income

$

3,743

 

 

$

4,059

 

 

$

3,396

 

Non-GAAP net income margin

 

11

%

 

 

10

%

 

 

10

%

 

 

 

 

 

 

Adjusted Operating Cash Flow and Free Cash Flow

 

Three Months Ended March 31,

 

Three Months Ended

December 31,

 

 

2024

 

 

 

2023

 

 

 

2023

 

Net cash provided by (used in) operating activities

$

3,471

 

 

$

7,642

 

 

$

(543

)

Operating cash flow margin

 

10

%

 

 

19

%

 

 

(2

)%

(Increase) decrease in changes in assets and liabilities:

 

 

 

 

 

Settlement assets

 

6,120

 

 

 

2,683

 

 

 

(2,983

)

Settlement liabilities

 

(1,570

)

 

 

738

 

 

 

2,343

 

Adjusted operating cash flow

 

8,021

 

 

 

11,063

 

 

 

(1,183

)

Less:.

 

 

 

 

 

Purchases of property and equipment

 

?

 

 

 

(28

)

 

 

(281

)

Software development costs

 

(2,829

)

 

 

(870

)

 

 

(2,180

)

Free cash flow

$

5,192

 

 

$

10,165

 

 

$

(3,644

)

Free cash flow margin

 

15

%

 

 

25

%

 

 

(10

)%

 

 

 

 

 

 

 


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