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Hello. Thank you for joining us for Expensify's Q1 2026 earnings call. I'm gonna start off with the legal disclosure and then hand off to Ryan Schaffer, our CFO, and David Barrett, our Founder and CEO. Please note that all the information presented on today's call is unaudited, and during the course of this call, management may make forward-looking statements within the meaning of the Federal Securities laws. These statements are based on management's current expectations and beliefs, and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold.

Please refer to today's press release and our filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expected or implied in any forward-looking statements made today. Please also note that on today's call, management will refer to certain non-GAAP financial measures. While we believe these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release or the investor presentation for a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures. With that, I'll hand it over to Ryan.

Thank you, Niki. Thanks everyone for joining today's call. Let's start with the Q1 financials. Revenue for the quarter was $34 million, down 6% year-over-year. Average paid members were 632,000, down 4% year-over-year. Total interchange revenue was $5.5 million, up 10% year-over-year. While we continue to see pressure on the top line, we are really focused on the fundamentals of the business and focusing our efforts on returning to growth. Operating cash flow was $0.1 million, and free cash flow was $2.5 million. The difference in those numbers is largely driven by the timing of customer payments. Our GAAP net loss was $2.3 million. Our non-GAAP net income was $3.6 million, and adjusted EBITDA was $6.2 million.

While revenue has declined, profitability is still strong, and that's a key theme for the business right now. As mentioned, we generated $2.5 million in free cash flow this quarter. It's worth noting that we also had a one-time legal payment of $2.6 million related to the class action lawsuit we've since settled. Absent that payment, we would have seen roughly $5 million in free cash flow this quarter. That said, we remain conservative in our outlook and are reiterating our full year 2026 free cash flow guidance of $6 million-$9 million. Always, we like to provide a look into the performance of next quarter's paid active member number.

For April 2026, we had 641,000 paid active members, which is an improvement from our Q1 average, and what we think is an encouraging sign for the quarter. In conclusion, we are focusing on maintaining strong fundamentals in the business, investing in long-term growth opportunities, migrating customers to New Expensify, and iterating quickly on their feedback. With that, I'll hand it over to David for a product update.

Thanks, Ryan. I think the simplest way to frame Q1 is this: We're building a more durable, more profitable business today while setting ourselves up for a much stronger growth story tomorrow. The numbers show the transition, the product tells you where we're going and how far we've actually come. In Q1, we made meaningful progress in both distribution and product adoption. A major focus was accelerating our bring your own card strategy. Historically, companies often had to change cards to get the full value of expense automation. With BYOC, they can keep the corporate cards they already have, connect them to Expensify, and automatically import transactions as expenses. That removes a major adoption barrier and lets us meet customers where they already are. We also expanded our partnership footprint.

We renewed our referral program with ANZ, added Kiwibank, and partnered with the Institute of Commercial Payments, giving us stronger visibility across the banking and commercial payments ecosystem. At the same time, we broadened the commercial ecosystem around Expensify with new ERP relationships with Campfire and Rillet, plus a travel integration with American Airlines. The goal is simple: Make Expensify fit naturally into the systems businesses already use. On the product side, Q1 was a strong shipping quarter with more than 30 improvements across the app. In January, we focused on practical finance workflows, better top-spending visibility, receipt rotation, automatic approval routing, old card assignment, bank account sharing, clearer card status labels, and Uber for Business discounts. In February, we launched a new home tab, upgraded insights, made Concierge available in more places, and added merchant and itemized receipt rules.

These are important because they move Expensify from simply capturing expenses to actively helping users manage spend, automate coding, and resolve issues faster. In March, we continued that momentum with account-related client workspaces, GPS miles tracking, expanded insights charts, stronger virtual card controls, mobile receipt cropping, faster report creation, bulk expense selection, inline editing, CSV member imports, and smarter home tab alerts. Taken together, these updates make New Expensify faster, more automated, and more useful for both individual employees and finance teams. Stepping back, Q1 is about strengthening the foundation while setting up the next phase of growth. The Expensify Card continued to perform well, with interchange revenue growing to $5.5 million, up 10% year-over-year. We also continue to generate cash, producing positive operating cash flow and $2.5 million of free cash flow in the quarter. At the same time, we're seeing encouraging growth signals.

April paid active users increased to 641,000, above the Q1 average of 632,000. Combined with the product velocity you just saw, the expansion of BYOC, and major AI capabilities coming in June, we believe the business is positioned for a potential inflection point. Our focus remains consistent. Keep improving New Expensify, reduce adoption friction, expand distribution, and turn the product momentum we're seeing into durable growth. With that, thank you to everyone for joining. Let's hop into our Q&A.

Perfect. Mark, I believe you're on the line if you wanna open us up for the Q&A.

Hi, can you hear me okay?

Yeah.

Thanks for taking my question here. Dave, just a question on a comment in your prepared remarks. You mentioned that you believe that the business was poised for an inflection point. I was wondering if you could just dig into that a little bit more.

Sure. I mean, I think that this isn't a new thing. We've been talking for a long time. The whole strategy behind New Expensify is to shift away from kind of a more traditional expense management solution towards a more modern, collaborative, AI-focused solution. We knew this was gonna be a huge investment, we knew it was gonna take a long time, and we're at the tail end of that. You know, we've been migrating users over, and I think we're just extremely pleased with the reaction we're getting from traditionally Classic customers moving to New Expensify, seeing the new capabilities, the AI, the collaboration, all that. I think on one hand it's just a lot of kind of mostly anecdotal, but really positive evidence coming from customers who are migrating over. Also, just seeing the excitement from new customers.

Well, kind of what we refer to as new native customers who've never seen an Expensify Classic. They're just coming to the product, and they really just get it, and they like it, and they really value it. It's validated a lot of our design decisions, and I think we feel really confident in that. Of course there's just, you know, just kind of the green shoot indicators, like, you know, April was pretty good from a paid member growth perspective, as we saw. Again, a lot of this is nothing new. This is the story we've been telling for a very long time. The story has always involved basically making a kind of, you know, difficult, but big swing on what we think is still a massive opportunity out there.

Like, when I think of it, you know, there's nothing has fundamentally changed about the market in the sense that I still think there's something like 100-1,000 times more opportunity out there than this traditional opportunity's ever seen. New Expensify is designed to go out and get it. I think we're more and more confident that we can. It's not going to happen overnight but, you know, we're a long-term business. We've always said that, and I think we just feel very, you know, excited and have a lot of conviction in that long-term strategy.

Great. Thanks. As a follow-up, maybe if you could just update us on the % of your Classic customers that have migrated to New Expensify.

I think it's about 60%, I would say. The main thing. Migration's going well. The nice thing about migration is we control the timeline of it, and we are migrating customers over and then paying very close attention to any feedback they have. I would say the most important feedback we've had is simply just performance. The functionality is great, and it's reliable, but it's just not fast enough for the larger customers. We never want to migrate over a customer that we're not confident is gonna have a great experience. I would say just in general, a lot of our engineering has shifted away from big sort of capital projects and more towards just rapidly integrating with the specific features that customers request, responding to feedback and so forth.

Right now, I would say a big thrust of our engineering is simply on hardening and improving the performance of our existing functionality in new.

Along with that, you know, to date, your migration strategy for the New Expensify platform has relied mainly on carrots rather than sticks. I was, you know, with about 60% migration so far, do you plan to shift that approach to move the rest over?

I mean, I don't think so. I think the carrots work pretty well. They've been working well for us. Again, we have the ability to maintain Classic, and so we don't, we're not backed into a corner in a sense, like we don't have to push people over. We do it because we think we can give them a better experience, and so there's no reason to, I guess, threaten anyone. It's, we want to pull them over with honey rather than vinegar. Is that how that saying goes? I think that we got plenty of time to do that. I think we have plenty of good opportunity or super exciting functionality to pull them over.

In fact, I would say one of the challenges is we have larger customers that want to come over and we're like, "Look, I know the functionality is really powerful. I know that it does all this new stuff, but the performance just isn't there yet." So I would say kind of we're experiencing a bit of the opposite problem, where we have enthusiasm to come over, and it's just not quite there from a performance perspective. So that's where a lot of our attention's at.

Great. That's helpful. Thank you. That's all for me.

Great.

Just got confirmation that we were double-booked, so we will speak to our other analysts offline. That's everyone we have live on the call right now.

Great. Well, thank you, everyone for dialing in. It's definitely an exciting time for us. I think, we're super excited about where this is going, and so appreciate your time.

Thank you.

Hello, and thank you for joining us for Expensify's Q4 and Full Year 2025 Earnings Call. I'm going to start off with the legal disclosure, and then I'll be handing over to Ryan Schaffer, our CFO; and David Barrett, our Founder and CEO. Please note that all the information presented on today's call is unaudited. And during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. Please refer to today's press release and our filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please also note that on today's call, management will refer to certain non-GAAP financial measures. While we believe these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release or the investor presentation for a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures. And with that, I'll hand it over to Ryan Schaffer.

Thank you, Niki, and thank you all for joining today's call. It was an exciting year for Expensify. We were the title sponsor of Apple's F1 movie. We generated nearly $20 million in free cash flow. We started incorporating more and more AI into the user experience and we made substantial progress on the migration to our new Expensify platform. Now let's dive into the Q4 financials. Revenue was $35.2 million. Average paid members were 650,000 and total interchange was $5.5 million. Our Q4 operating cash flow was $2.2 million. Our Q4 free cash flow was $3.2 million and net loss was $7.1 million. Our Q4 non-GAAP net loss was $2.1 million and adjusted EBITDA was $3.3 million. Now let's move on to fiscal year 2025. In fiscal year '25, revenue was $142.1 million, average paid members was 650,000 and total interchange was $21.3 million. Fiscal year '25 operating cash flow was $20.1 million. Free cash flow was $19.9 million and net loss was $21.4 million. That net loss was primarily driven by stock-based comp and expenses related to the F1 movie. Our full year 2025 non-GAAP net income was $5.2 million and adjusted EBITDA was $16.9 million. Now let's talk about free cash flow guidance for 2026. Our fiscal year '25 free cash flow was $19.9 million, coming in at the high end of our initial guidance of $16 million to $20 million for 2025. We are initiating fiscal year 2026 free cash flow guidance of $6 million to $9 million. That's lower than previous years due to a conservative outlook on 2026, combined with the fact that we are expecting to increase investment in sales and marketing as well as AI this year. We will continue to keep you updated on our free cash flow guidance as it evolves throughout the year. As always, here's our Q1 flash numbers for our paid members in January. We saw 626,000 paid members in the first month of Q1. We typically see a lot of seasonality in January and it is generally down compared to December, and then we usually see members increase in future months. Now turning to some business highlights for fiscal year 2025. We entered a multiyear integration partnership with Uber for Business to automate travel and meal receipts, strengthening policy controls across corporate travel and expense workflows. This partnership reinforces the power of our platform and deepens our integration into customers' day-to-day spend processes. We were also recognized with the TrustRadius 2026 Buyers' Choice Award in the expense management category, which is based directly on customer reviews, highlighting our capabilities, value for price and customer relationships. We think it's encouraging to receive that third-party validation based off of reviews from our users. Expensify travel continues to be an area of growth in the business. Bookings in Q4 are up 434%, compared to Q4 of 2024. The sustained growth reflects strong customer adoption and continued momentum around our travel offering. The Expensify Card is another bright spot in the business. Interchange increased 24% in fiscal year 2025, compared to the prior year. And finally, we repurchased over 4.8 million shares of our Class A common stock throughout 2025, totaling approximately $9 million, reflecting management's continued confidence in the long-term opportunity of the business. And now I'll hand it over to David for a product update.

Thanks, Ryan. So it's been a really exciting quarter on the product side, and I want to walk through a few things, where we are in migration, some new stuff we're going around cards and growth and then our AI story, which I think is getting really, really interesting. So as you know, a key element of our business strategy is to get existing customers over to new Expensify. And I'm happy to say we're basically there. New Expensify now has full feature parity with Classic for customers representing 90% of our revenue. That's the target we've been working towards, and we've hit it. Classic isn't going away. We're keeping it around for customers who need it or prefer it. But the big news is new Expensify is feature complete for essentially everyone. We've now rolled it out to 63% of Classic customers. The way we do this is what we call nudging. We move customers over in cohorts. They can always switch back to Classic if they want, and the vast majority simply stay. They choose to stay on new, and that's really the signal. Nobody is making them. They just like it better. Right now, we're focused on performance and polish while we work through the best. And we're beginning the migration of our approved accounting network, which is a big deal. These are the accountants managing the books for a huge chunk of our customer base. We built much more powerful native reporting and charging for them and I'm particularly excited about what we're calling our virtual CFO insights. It gives accountants a whole new level of visibility into the clients' financials that just didn't exist before. So one thing I want to highlight that I think is underappreciated. Most of the market still uses traditional bank cards. We're talking more than 55% of businesses according to recent NBER research. Every accountant out there has clients, who want to keep their existing card and the reality, we support all of them. Expensify connects to over 10,000 global banks and over 80% of those card imports happen via direct bank connections at 0 marginal cost to us. So we're not just the best product for the Expensify Card. We believe we're the best product for whatever card you already have. And now we're layering real spend management tools on top of that. Merchant-based rules can be fine grades coding control. So you can say every time someone swipes this merchant, apply these categories, these tags, this client, it just happens automatically. And integrated online reconciliation means you're not doing exports anymore. It's all right there. This is a really compelling story for accountants, especially because our clients aren't all going to switch cards and now we're the best answer regardless. And here's something I'm really excited about. As migration completes, we're turning our attention back to what's always been Expensify's core strengths, product-led growth. Here's the thing. Over half of our sign-ups have never been team leaders. Most of our customers were introduced to Expensify by an employee, not a boss. That's always been our superpower. Employees discover us, fall in love with us and then the company follows, bottom-up lead gen to a top-down sale. New Expensify is architected exactly like a social network, a single unpartitioned name space with any-to-any connectivity, and that architecture is what makes this possible. An employee can sign up before their boss even knows what Expensify is, and that creates a really interesting dynamic. So we're launching a new submit plan. It's free for all members, and the idea is to get free expense and chat into the hands of employees the millions of businesses that signed up over the past 15 years. We expect this will create grassroots collective pressure to adopt company-wide. It's the Expensify challenge, download the app, submit to your boss and see what happens. We've always done this, but New Expensify lets us do it at a totally different scale. Okay. And now the AI side, which I think where things get really, really interesting. Everybody is talking about AI right now. So I want to be specific about what makes ours different because I genuinely think it is. We call it accountable intelligence. And the reason for that framing is that Concierge isn't just AI that does things. It's AI that can explain what it did, correct itself when wrong and keep working in the background while you sleep. There's a line in the slide that I think really says it well. If your AI can't talk, can't explain what it did, can't learn from its mistakes and sleeps when you do, how intelligent is it really? So there are 3 things I want to highlight. First, Concierge is contextual. Our whole thesis has been that chat is the UI of AI. It only works if the AI is built into the product, not stuff on top of it. You know the clipy analogy, something clearly designed separately, and that's kind of bolted on. That's not what this is. With Concierge, wherever you are in the product, inside expense report, looking at a card swipe, hitting an error message, the AI is right there. You just ask what the thing you're already looking at, no copy paste, no uploading, no explaining a situation from scratch. Second, Concierge is correctable. This is the one that I think people underestimate. Automation is great until something goes wrong and you have no idea why or how to fix it. Concierge self-diagnoses and self-corrects. You can ask it why it did something. It will tell you, and then you can just tell to do something differently, that's done. No guesswork. That's a different relationship with automation than anything that exists today. And third, Concierge is continuous. It's not sitting around waiting for you to ask at something. It's working in the background, reviewing the books, analyzing trends, monitoring system health and proactively flagging and fixing issues before they become real problems. That's what accountable means. It's not just smart, it's responsible. So zooming out, I think the story of 2025 is that we lean into our strengths and it's showing up. Cross-selling is working. Card interchange grew 24% year-over-year to $21.3 million. Travel bookings grew over 400% from Q4 of last year to Q4 of this year. We generated nearly $20 million in free cash flow and repurchased over $9 million in shares. These are the numbers of the business that's executing. Finally, the AI-first design is stronger than ever. Chat is the UI of AI. Our chat-first design makes us AI first by definition, and Concierge is the accountable AI that knows what you're talking about, can fix itself and wrong and works while you sleep. There's a lot more to come in all this. Happy to take your questions.

Great. Aaron, I think I see you on the line. Do you want to start us off?

Awesome. So my first question for you, Dave, is application software multiples have obviously been getting hammered in public markets recently, while investors think through terminal value questions with the zeitgeist being barriers to product development are significantly lower due to advances at the frontier labs, horizontal apps focusing on driving efficiencies and workflows performed by humans today that people think will be performed by agents in the future like Expensify have been hit particularly hard. So the most important questions on investors' minds right now, I think, are what's Expensify's place in an AI world where you can buy code to semifunctional expense management app. I know you just talked about Concierge and the differentiation there. And then what are the primary moats that you see for the business?

Yes. Great questions. So I think fundamentally, vibe coding sort of the ability to generate app is going to wipe out huge classes of applications. But I think those applications are anything that falls in the category of you upload your own data, something analyzes it and then gives it back to you. And that basically operates in kind of a small dish where I think anyone who's just organizing their own receipts, for example, I agree. I think that AI is a real challenge for that industry. However, that's really not our industry. AI is not particularly good in places, where it's highly collaborative, where, for example, you're actually sharing data with other people. I'm not going to say it's not possible. I'm just saying it's just not really possible with the tools right now. Like with ChatGPT, with Claude, with Gemini, it's actually very hard to use the AI with someone else in the process. again, everything is doable, everything is changing. But right now, kind of where we're at, collaboration is one of the key differentiations that makes sort of Expensify, one of the most because it's not just a tool to work with other people, Expensify is a tool for collaborating with other AIs as well. That's one. I would say second, AI can only really automate what you can personally do. And so reading your own receipts, things like this, sure, AI is good at that. But AI can't like just issue a virtual card. Like you don't have that ability. You can't actually just directly transfer money through the ACH network. You have to go through some kind of a gatekeeper, the gatekeeper could be your bank or it's us. But more importantly, it's not the AI itself. AI can only do what you can do, but you are not allowed to access the same kind of networks that we are. So one, I think there's basically anything collaborative is where I think applications still have a lot of strength. Two, anything that accesses kind of like regulated financial networks is another place where we have strength. And so I think there's actually a variety of moats that still protect applications like Expensify because AI doesn't make you PCI compliant. AI doesn't make you have anti-money laundering sort of compliance and sort of routine. And so I think there's still a tremendous amount of opportunity for working with the agents and not doing them so much as competitors, but the opportunity for new customers. Eventually, you are going to want your agents to be making purchases for you. And you just -- but you don't trust the agents. I mean we see all these stories about how an AI just like wiped out the inbox of the top AI person in Meta or whatever it is. AI aren't quite fully trustworthy yet. And so I think that before you give them control of your credit card, you're going to want to have spend controls in those AIs just like you want to have spend controls on your employees. And so I think the way that we see AIs and agents in the future is those are actually opportunities for more seats in the platform. Every time you automate away an existing seat with an agent, that kind of creates another seat that needs controls as well. So I'm not going to lie, it is a very tumultuous world. I think that there's a lot of ways that things can go wrong. But there's also a lot of ways things can go incredibly right. And so I think we've made a point starting years ago, recognizing there's this huge AI disruption on the way. And we invested for 5 years to build a platform that we think isn't merely designed to kind of survive this AI title wave, but really ride it and thrive in it. And so I'm actually way more excited about the opportunity that AI creates for a company like Expensify than the risks.

Got it. That's really thoughtful. It's good to hear a technologist opinion when you hear the constant loop of investors all day from my seat. And then the second question I have is this was the first quarter that paid members have increased since 4Q '24. One of the tricky things on Expensify is always trying to figure out what's macro and what's idiosyncratic, especially with the migration to a new version of the product and competition with a lot of well-funded competitors. So my question here is, what do you attribute that small increase in paid members to -- in 4Q '25? Do you think it's a result of the migration and people seeing success with people enjoying the new product or just macro?

I can take that one. So Q4 -- I mean, there's some seasonality, right? Q4 is generally pretty strong in the same way that January is usually not. So I think that, that is just kind of consistent with what we've seen in terms of Q4 generally performs better than Q3. So I think it's primarily seasonal. However, I would say that it's expected because we typically see seasonality. However, I think migration obviously helps us retain customers. And obviously, it's something that we're -- as we deploy this in 2026 for the rest of our customers, we're going to be watching this really closely, and we think that it's going to help user growth in general.

All right. Well, I just heard back and our other analysts are going to meet us in the call back. So we are good to go.

All right, thanks. We appreciate it. Thanks, everyone.

Thank you all. Have a good one.