Expensify, Inc. Q3 FY2024 earnings call

Key Points

• Total revenue in Q3 was $35.4 million, up 6.3% QoQ but down 3% YoY, and beat street consensus.
• Average paid members were flat QoQ at 684,000, down 5% YoY.
• Expensify Card interchange was $4.6 million, a 48% YoY increase; 94% of existing card spend migrated to new program, aiming for 100% by end of year.
• Free cash flow was $6.7 million in Q3, with operating cash flow at $3.7 million, net loss at $2.2 million, non-GAAP net income at $5.4 million, and adjusted EBITDA at $9.7 million.
• New Expensify platform has a chat-centric design to automate 80-20 workflow in expense management, aiming for 100% automation.
• Expensify Travel is in market generating revenue, though no specific revenue contribution shared yet.

Total revenue in Q3 2024 was $35.4 million, a 6.3% quarter-over-quarter increase but a 3% year-over-year decrease. Average paid members were flat quarter-over-quarter at 684,000, a 5% decrease compared to the same period last year. Interchange from the Expensify Card was $4.6 million, a 48% year-over-year increase. Existing old program generated $0.9 million in net interchange, while the new program generated $3.7 million. Free cash flow in Q3 was $6.7 million, operating cash flow was $3.7 million, net loss was $2.2 million with non-GAAP net income of $5.4 million, and adjusted EBITDA was $9.7 million.

Free Cash Flow Guidance

• Increased free cash flow guidance for the year from $15-16 million to $19-20 million.

Business Risks

• Lingering challenges reflected in 3% YoY revenue decrease.
• Impact of macroeconomic factors on paid member growth and business performance.

Q: What is the revenue contribution of Expensify Travel today and its future potential?

A: David Barrett stated travel and expense is a large category with potential for lift, but no specific numbers shared yet.

Q: How does the company plan to manage stock buybacks going forward?

A: Anuradha Muralidharan and David Barrett mentioned being opportunistic and flexible, but no concrete plans shared yet.

Q: What is driving the sub-user tick up and stabilization?

A: Anuradha Muralidharan noted optimism for future quarters with new Expensify ramping up, and existing customer usage expansion rebounding.

Q: How is the go-to-market strategy performing and effective?

A: Anuradha Muralidharan highlighted organic channels (SEO, word-of-mouth) are key, focusing on conversion improvement and redirecting new leads to the new platform.

Q: Any insights on interchange from travel traction and free cash flow drivers?

A: Anuradha Muralidharan said travel's impact on interchange isn't broken out in detail; free cash flow driven by higher interchange take rate and operational efficiencies, no workforce reduction.