Expensify Q2 Earnings Call Highlights

• Will Expensify Get Even Cheaper To Buy? 

Expensify (NASDAQ:EXFY) reported second-quarter revenue of $33.9 million and continued improvements in profitability and cash generation, while management emphasized growth in its newer AI-focused expense management platform as its legacy Classic product base declines.

Chief Financial Officer Ryan Schaffer said average paid members totaled 640,000 during the quarter. Expensify card interchange revenue across its Classic and New Expensify offerings reached $5.9 million, up 12% from a year earlier.

“While we continue to see some pressure on the top line, our focus remains firmly on the financials of the business and on executing the work required to return to sustainable growth,” Schaffer said.

Cash Flow Guidance Raised

Operating cash flow was $8.4 million in the second quarter, while free cash flow was $6.4 million. Free cash flow increased 2% year over year and 162% sequentially, according to Schaffer.

The company’s GAAP net loss narrowed to $3.9 million from $8.8 million in the prior-year period. Non-GAAP net income was $3.4 million, compared with a non-GAAP net loss a year earlier, while adjusted EBITDA improved to $6.6 million from a negative result in the prior-year quarter.

Based on its first-half results and outlook, Expensify raised its full-year 2026 free-cash-flow forecast to between $12 million and $14 million, from prior guidance of $6 million to $9 million.

Schaffer said the company has begun deploying sales and marketing spending, with additional investment expected later in the year. He also said Expensify’s AI-related spending is increasing, though the company is examining ways to reduce that expense without affecting operations. In addition, he cited the resolution of a class-action lawsuit settlement in the first quarter as providing greater clarity around the company’s financial outlook.

For July, Expensify reported 634,000 paid members. Schaffer said the lower figure reflected a typical seasonal decline associated with summer vacations and reduced business travel, and that the company expects activity to improve as the third quarter progresses.

Share Repurchases Reduce Outstanding Shares

During the quarter, Expensify completed a modified Dutch auction tender offer, repurchasing about 6.1 million Class A shares at $1.20 per share. The tender offer was substantially undersubscribed despite being offered at a premium to the market price, Schaffer said.

After completing the tender offer, the company bought another 712,000 Class A shares in the open market at an average price of $1.63 per share. Total second-quarter repurchases were approximately 6.8 million shares, representing roughly a 7% reduction in shares outstanding.

Schaffer said the purchases reflected management’s conviction in the business and its commitment to return capital to shareholders while continuing to invest in growth.

New Expensify Revenue Surges as Classic Base Declines

Founder and Chief Executive Officer David Barrett described Expensify Classic as a mature, cash-generating traditional expense management product, while characterizing New Expensify as the company’s growth platform built around mobile, chat and AI-enabled workflows.

New Expensify revenue from customers that signed up directly for the product, excluding former Classic customers that migrated to the new platform, rose more than 250% year over year to more than $10 million in annual recurring revenue, Barrett said.

During the question-and-answer session, Schaffer said the figure appeared to have increased from about $7 million at the end of the first quarter to around $12 million at the end of the second quarter. Barrett said New Expensify had nearly 12,000 customers.

Management said New Expensify now accounts for 56% of users, marking the point at which more users are on the new platform than on Classic. Barrett added that virtually all new revenue is being added through New Expensify because customers can no longer purchase Classic.

“We have our large Classic cohort, which is slowly decreasing,” Schaffer said, noting that the company is no longer adding new customers to the legacy offering. “We have the New Expensify cohort, which is small but growing rapidly.”

Management said the timing of when New Expensify growth will offset the declining Classic customer base remains uncertain. Barrett said the company is working to complete the migration of remaining Classic users and address concerns from customers adjusting to the different product experience.

AI, Card and Travel Initiatives

Barrett said the company released more than 30 features and enhancements during the second quarter. Product updates included personal card imports into the Expensify wallet, shared card feeds across workspaces, card freeze and unfreeze capabilities, company card imports, expanded prohibited-expense detection, real-time card rules and automatic VAT capture through SmartScan.

The company also launched its Expensify MCP integration, which Barrett said allows third-party AI assistants including ChatGPT, Claude and Cursor to access Expensify expense data through natural-language interactions. Expensify also made its custom AI agents generally available after a beta period.

Schaffer said the company’s “bring your own card” marketing message has resonated with customers that want to retain their existing corporate card programs while using Expensify’s expense automation tools. He said card volumes posted a modest quarter-over-quarter increase and have continued to grow consistently.

On monetization, Barrett said the fundamental model for New Expensify remains similar to the company’s legacy business, though its simpler, email-enabled and chat-focused experience could appeal to a broader market. Schaffer said the company is also considering additional revenue opportunities, including usage-based monetization for AI capabilities, though he said there was nothing to announce.

Expensify recently introduced Consolidated Travel Billing, a Travel feature Schaffer called a potentially lucrative offering. He said the company has a large waitlist of customers for the feature and continues to view Travel as a key way to engage larger enterprise customers.

About Expensify (NASDAQ:EXFY)

Expensify, traded on NASDAQ under the ticker EXFY, is a software-as-a-service (SaaS) company specializing in automated expense management and reporting. Its flagship platform enables employees to capture receipts via mobile app or email, automatically extract expense details through optical character recognition (OCR) and artificial intelligence, and submit streamlined expense reports. The solution is designed to eliminate manual data entry and reduce approval cycle times, serving a broad range of industries from small businesses to large enterprises.

Founded in 2008 by entrepreneur David Barrett, Expensify has grown from a simple receipt-scanning app into a comprehensive spend management suite.

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