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EI

Expensify, Inc. (EXFY)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $35.07M, down 1% year over year; GAAP diluted EPS was -$0.03, with non-GAAP net income of $4.35M and adjusted EBITDA of $6.50M (19% margin) .
  • Relative to S&P Global consensus, revenue missed by ~$0.58M* and Primary EPS missed by ~$0.007*; S&P’s EBITDA consensus was materially higher than actual EBITDA*, while company focuses on adjusted EBITDA .
  • Free cash flow of $1.23M was lower due to unfavorable timing of working capital, but FY25 FCF guidance of $19–$23M was reaffirmed .
  • Strategic highlights: Expensify Travel bookings +36% q/q and +95% since Q1; interchange from Expensify Card +18% y/y to $5.4M; Brooklyn Nets partnership elevates brand and product adoption .

What Went Well and What Went Wrong

What Went Well

  • Interchange growth remained robust: “Interchange derived from the Expensify Card grew to $5.4 million, an increase of 18% compared to the same period last year” .
  • Travel momentum accelerated: “Expensify Travel saw a 36% increase in quarterly travel bookings. Travel bookings have increased by 95% since Q1 2025” .
  • Product/AI innovation: CEO introduced “Concierge AI, the world’s first Hybrid Multi-Modal Contextual Expense Agent,” emphasizing hybrid human escalation, multi-modal functionality, and contextual design built into the UI .
  • Brand/customer validation: Brooklyn Nets named Expensify the official travel and expense partner; long-time customer adopted Expensify Travel in Q3 .

What Went Wrong

  • Top-line softness: Revenue decreased 1% y/y to $35.07M, with gross margin dollars down to $17.40M and operating loss of $2.26M as operating expenses rose y/y .
  • Membership headwinds: Paid members fell to 642k, down 6% y/y and down sequentially vs. Q2 (652k) and Q1 (657k) .
  • FCF compression: Free cash flow dropped to $1.23M (4% margin) vs. $6.31M in Q2 and $9.10M in Q1 due to timing of working capital; adjusted EBITDA also declined y/y (19% vs. 27% last year) .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$36.07 $35.76 $35.07
Gross Margin ($USD Millions)$18.24 $18.58 $17.40
Operating Income ($USD Millions)$(1.49) $(10.34) $(2.26)
Net Loss ($USD Millions)$(3.17) $(8.79) $(2.32)
GAAP Diluted EPS ($USD)$(0.03) $(0.10) $(0.03)
Adjusted EBITDA ($USD Millions)$8.40 $(1.40) $6.50
Adjusted EBITDA Margin (%)n/an/a19%
Non-GAAP Net Income ($USD Millions)$4.82 $(1.86) $4.35
Non-GAAP Net Income Margin (%)13% (5)% 12%
Cash from Operations ($USD Millions)$4.81 $8.92 $4.17
Free Cash Flow ($USD Millions)$9.10 $6.31 $1.23

KPIs

KPIQ1 2025Q2 2025Q3 2025
Paid Members (000s)657 652 642
Interchange ($USD Millions)$5.1 $5.3 $5.4
Travel Bookings Growth (%)+166% q/q +44% q/q +36% q/q; +95% since Q1

Estimates vs Actuals (S&P Global – Q3 2025)

MetricQ3 2025 ConsensusQ3 2025 Actual
Revenue ($USD)$35.65M*$35.07M
Primary EPS ($USD)$0.054*$0.047* and GAAP EPS $(0.03)
EBITDA ($USD)$9.05M*$(2.02)M* and Company-Reported Adjusted EBITDA $6.50M

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Free Cash Flow ($USD Millions)FY 2025$17–$21 (Q1 guide) $19–$23 (Q2 reaffirmed) Raised in Q2, Maintained in Q3
Stock-Based Compensation – Total ($USD Millions)Q4 2025$5.6–$7.6 (as of Q2) $5.4–$7.4 Lowered
Stock-Based Compensation – Total ($USD Millions)Q1 2026$5.4–$7.4 (as of Q2) $5.2–$7.2 Lowered
Stock-Based Compensation – Total ($USD Millions)Q2 2026$5.2–$7.2 (as of Q2) $5.1–$7.1 Lowered
Stock-Based Compensation – Total ($USD Millions)Q3 2026n/a$4.9–$6.9 New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Concierge AI / AI-first design“Adding… Concierge voice” (Q1) ; Continued AI-first positioning (Q2 summaries in press) Launch of hybrid, multi-modal, contextual Concierge AI; chat-first UI embedded throughout product Strengthening product differentiation and cost-to-serve potential
Migration: Classic → New ExpensifyPreparation and early migrations (Q1) ; continued progress (Q2) Collect customers migrated; <50% of revenue on New; active nudging, feature parity near year-end Steady progress; customer feedback drives pacing
Travel product tractionQ1: +166% q/q growth and wide rollout ; Q2: +44% q/q +36% q/q; +95% since Q1; marquee Nets deal Sustained adoption; upsell/cross-sell to existing base
Paid members trend657k (Q1) ; 652k (Q2) 642k (Q3) Sequential declines; watch conversion/migration impacts
Capital allocationRepurchases initiated (Q2) Repurchased ~1.58M shares for ~$3.0M Ongoing buybacks signal confidence
Macro/travel riskNot highlightedGovernment shutdown scenario analysis: potential travel timing impacts Monitor macro/newsflow effects on travel demand

Management Commentary

  • Founder’s letter: “Expensify continues to generate free cash flow, grow interchange (up 18% y/y), and grow travel bookings (up 95% since Q1)… we’re standing by our FY’25 free cash flow guidance of $19.0 million to $23.0 million.”
  • On AI differentiation: “Concierge AI… Hybrid… Multi-modal… Contextual… built into the UI such that you can ask questions or request changes directly inside your expense policy, expense report, or individual expense itself.”
  • On migration status: “We’ve migrated all Collect customers off Classic and fully onto New Expensify… and are focused on migrating all Control customers right now.”
  • CFO highlights: “Revenue was $35,100,000… operating cash flow was $4,200,000… free cash flow was $1,200,000… we reiterate our fiscal year 2025 free cash flow guidance of $19,000,000 to $23,000,000.”

Q&A Highlights

  • AI UI advantage: Management emphasized contextual, chat-first design integrated throughout the product, enabling natural language control and human fallback for complex issues .
  • Migration pacing and revenue mix: Less than 50% of revenue is on New Expensify; feature parity targeted by year-end; migration paced by customer comfort with iterative improvements .
  • Cost-to-serve and monetization: Support burden expected to decline post-migration; New Expensify enables easier card issuance and better travel experiences, supporting monetization .
  • Macro risk: Government shutdowns could affect travel behavior/timing; uncertainty is a business headwind .
  • Near-term activity: October paid members “flash” at 653k, above Q3 average, an early positive sign into Q4 .

Estimates Context

  • Q3 comparison vs S&P Global: Revenue $35.65M* vs actual $35.07M, a modest miss; Primary EPS $0.054* vs S&P actual $0.047* and GAAP EPS -$0.03; EBITDA $9.05M* vs S&P actual $(2.02)M*, while company-reported adjusted EBITDA was $6.50M .
  • Forward Q4 snapshot: Revenue consensus $34.38M*, Primary EPS $0.055*, EBITDA $8.19M*, with limited coverage (Revenue # of estimates: 1; EPS # of estimates: 3). Values retrieved from S&P Global.

Key Takeaways for Investors

  • Narrative: Expensify is pivoting toward an AI-first, chat-centric platform with measurable traction in Travel and card interchange; migration execution is central to unlocking lower support costs and cross-sell potential .
  • Near-term trading lens: Print was light vs consensus on revenue and EPS*, and FCF compressed on timing; watch Q4 demand signals (paid members “flash” improvement), Travel momentum, and interchange growth . Values retrieved from S&P Global.*
  • Medium-term thesis: Successful Control migration (>50% of revenue) could expand monetization vectors (Travel, cards) and reduce cost-to-serve; AI differentiation may widen competitive moat and support pricing power .
  • KPIs to monitor: Paid members trajectory, Travel bookings growth, interchange dollars, adjusted EBITDA conversion, and free cash flow seasonality .
  • Guidance watch: FY25 FCF $19–$23M maintained; SBC outlook trimmed across forward quarters, marginally supportive to margins .
  • Competitive backdrop: Spend-management innovation remains active (e.g., Payhawk’s “Link & Control” press); Expensify’s AI-first, contextual approach and integrated Travel may prove differentiating .
  • Brand leverage: Brooklyn Nets partnership enhances visibility and validates Travel product in marquee settings .

Appendices

Additional Press Releases (Q3 period)

  • Expensify Named Official Travel and Expense Management Partner of the Brooklyn Nets (multi-year partnership; adoption of Expensify Travel) .

Selected Financial Statement Extracts (Q3 2025)

  • Condensed Consolidated Statements of Operations and Balance Sheets included in Exhibit 99.1 to the November 6, 2025 8-K .

Notes

  • The company defines adjusted EBITDA, non-GAAP net income, and free cash flow as disclosed; reconciliations provided in the press release .
  • Consensus and actuals marked with an asterisk are from S&P Global; definitions may differ (e.g., EBITDA vs Adjusted EBITDA). Values retrieved from S&P Global.*