Increased revenues 72.6% year-over-year,
introduced Free Plan with unparalleled functionality, and announced
up to 2% cash back on all Expensify Card spend
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
announced results for its quarter ended September 30, 2021.
“The biggest news coming out of Q3 was the launch of our Free
Plan for SMBs. It offers all the basics of Expensify for free –
including corporate cards with up to 2% cash back, reimbursements,
bill pay, invoicing, and travel booking – so teams don't have to
worry about their back office while they grow their business,” said
David Barrett, founder and CEO of Expensify. “We're especially
excited to watch our Free Plan spread naturally across
organizations as a result of our viral, bottom-up business model
and the immense greenfield opportunity that still remains in our
target market.”
“We saw strong paid member growth in Q3 as SMBs continue to
bounce back from the pandemic, business-wise,” said Ryan Schaffer,
CFO of Expensify. “Combine that with a 200% year-over-year increase
in Expensify Card interchange and we're very confident in our
ability to continue executing our long-term vision.”
Third Quarter 2021
Highlights
Financial:
- Revenue was $37.4 million, an increase of 72.6% from the same
period last year.
- An IPO-related bonus expense of $26.3 million impacted net
(loss) income and Adjusted EBITDA.
- Net loss was $(6.3) million, compared to $(6.9) million for the
same period last year. This was due to the IPO-related bonus.
- However, Non-GAAP net income (excluding the IPO-related bonus)
was $19.9 million.
- Adjusted EBITDA was $(6.5) million, compared to $7.4 million
for the same period last year. The decrease was due to the
IPO-related bonus.
- Adjusted EBITDA excluding the IPO-related bonus was $19.8
million.
- Operating cash flows were $34.6 million.
Business:
- Paid members saw the biggest uptick in Q3 since the onset of
the COVID-19 pandemic in March 2020. Average monthly paid members
increased to 667 thousand, up from 639 thousand in the previous
quarter. This is attributed to an increase in marketing spend and
the strengthening of SMBs as lockdown restrictions were
lifted.
- In September 2021, Expensify introduced the Free Plan, which
allows members to roll out Expensify functionality across their
businesses for free. The Expensify Card, expense management,
next-day reimbursement, invoicing, bill pay, and travel booking are
all included in the Free Plan.
- The Expensify Card continues to perform well. Interchange from
the card increased by 207% from the same period last year.
- Cash back, a new Expensify Card benefit, launched in September
2021. Now, all Expensify members can get up to 2% cash back on all
purchases using the Expensify Card.
- Expensify.org selected 62 grassroots organizations as winners
of the Community Justice Grant Challenge. All 62 organizations will
be reimbursed up to $5,000 each to help fight injustice in their
communities. From those 62 organizations, 10 were selected by
community vote to be reimbursed up to $25,000 each.
- In line with its continued commitment to ESG principles,
Expensify reached carbon neutrality in 2021 and set a goal of Net
Zero emissions by 2030.
Financial Outlook
Expensify's outlook statements are based on current
expectations. 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.
For the fiscal fourth quarter ending December 31, 2021,
Expensify expects:
- Revenue between $38.2 million and $39.2 million
- Average monthly paid members between 673 thousand and 691
thousand.
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 results at 2:00
p.m. Pacific Time today. 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,
Adjusted EBITDA excluding the IPO-related bonus, and Non-GAAP net
income.
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.
We define Adjusted EBITDA as net income from operations
excluding provision for income taxes, interest and other expenses,
net, depreciation and amortization and stock based
compensation.
We define Adjusted EBITDA excluding the IPO-related bonus as net
income from operations excluding provision for income taxes,
interest and other expenses, net, depreciation and amortization,
stock based compensation, and IPO-related bonus costs.
We define Non-GAAP net income as GAAP net income excluding the
IPO-related bonus costs.
The tables at the end of the 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, 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, projected costs, prospects,
plans, objectives of management and expected market growth 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,” “objective,” “seeks,”
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: the effects of the COVID-19
pandemic and the end of the COVID-19 pandemic on our business,
results of operations and financial condition, and the global
economy generally; 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 ability to effectively
manage our exposure to fluctuations in foreign currency exchange
rates; the increased 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, including the societal
and economic impact of the COVID-19 pandemic, and geopolitical
uncertainty and instability; 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 10 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.
Consolidated Balance
Sheets
(unaudited, in thousands, except
share and per share data)
As of September 30,
As of December 31,
2021
2020
Assets
Cash and cash equivalents
$
68,058
$
34,401
Accounts receivable, net
13,608
10,024
Settlement assets
25,107
14,308
Prepaid expenses
3,813
927
Related party loan receivable, current
824
600
Other current assets
11,817
3,404
Total current assets
123,227
63,664
Capitalized software, net
6,607
3,722
Property and equipment, net
16,335
15,363
Lease right-of-use assets
2,588
3,733
Deferred tax assets, net
418
418
Related party loan receivable,
non-current
—
—
Other assets
712
833
Total assets
$
149,887
$
87,733
Liabilities, convertible
preferred stock and stockholders' deficit
Accounts payable
$
1,998
$
2,328
Accrued expenses and other liabilities
23,200
3,535
Borrowings under line of credit
15,000
15,000
Current portion of long-term debt, net of
issuance costs
547
2,454
Lease liabilities, current
1,540
1,575
Settlement liabilities
25,007
14,308
Total current liabilities
67,292
39,200
Lease liabilities, non-current
1,192
2,350
Deferred tax liabilities, net
916
916
Other liabilities
405
877
Long-term debt, net of issuance costs
52,093
30,321
Total liabilities
121,898
73,664
Commitments and contingencies (Note
12)
Convertible preferred stock, par value
$0.0001; 4,203,139 shares authorized, issued and outstanding at
September 30, 2021 and December 31, 2020 (aggregate liquidation
preference of $24,929,457 at September 30, 2021 and December 31,
2020
45,105
45,105
Stockholders' deficit:
Common stock, par value $0.0001;
95,000,000 shares authorized: 36,240,800 and 29,366,940 shares
issued and outstanding at September 30, 2021 and December 31, 2020
respectively
—
—
Additional paid-in capital
27,416
21,312
Subscriptions receivable (including
accrued interest of $0)
(513
)
—
Accumulated deficit
(44,019
)
(52,348
)
Total stockholders' deficit
(17,116
)
(31,036
)
Total liabilities, convertible preferred
stock and stockholders' deficit
$
149,887
$
87,733
Expensify, Inc.
Consolidated Statements of
Income
(unaudited, in thousands, except
share and per share data)
Three months ended September
30,
Nine months ended September
30,
2021
2020
2021
2020
Revenue
$
37,447
$
21,694
$
102,471
$
62,335
Cost of revenue, net
18,197
8,443
33,768
23,881
Gross margin
19,250
13,251
68,703
38,454
Operating expenses:
Research and development
2,167
2,268
8,138
4,645
General and administrative
18,333
14,579
35,827
24,717
Sales and marketing
7,608
1,491
14,555
7,814
Total operating expenses
28,108
18,338
58,520
37,176
(Loss) income from operations
(8,858
)
(5,087
)
10,183
1,278
Interest and other expenses, net
(1,054
)
(646
)
(2,560
)
(2,160
)
(Loss) income before income taxes
(9,912
)
(5,733
)
7,623
(882
)
Benefit (provision) for income taxes
3,567
(1,205
)
706
(2,570
)
Net (loss) income
$
(6,345
)
$
(6,938
)
$
8,329
$
(3,452
)
Less: income allocated to participating
securities
—
—
(5,625
)
—
Net (loss) income attributable to common
stockholders
$
(6,345
)
$
(6,938
)
$
2,704
$
(3,452
)
Net (loss) income per share attributable
to common stockholders:
Basic
$
(0.18
)
$
(0.25
)
$
0.09
$
(0.13
)
Diluted
$
(0.18
)
$
(0.25
)
$
0.07
$
(0.13
)
Weighted-average shares of common stock
used to compute net (loss) income per share attributable to common
stockholders:
Basic
34,490,860
27,951,536
31,301,387
27,095,925
Diluted
34,490,860
27,951,536
41,452,880
27,095,925
Expensify, Inc.
Consolidated Statements of
Cash Flows
(unaudited, in thousands)
Nine months ended September
30,
2021
2020
Cash flows from operating activities:
Net income (loss)
$
8,329
$
(3,452
)
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization
3,732
2,353
Reduction of operating lease right-of-use
assets
552
1,120
Loss on impairment, receivables and sale
or disposal of equipment
283
91
Stock-based compensation
2,495
12,951
Amortization of debt issuance costs
23
24
Deferred tax assets
—
2,304
Changes in assets and liabilities:
Accounts receivable
(3,865
)
(229
)
Related party loan receivables
(224
)
—
Settlement assets
(3,344
)
312
Prepaid expenses
(2,886
)
(291
)
Other current assets
1,212
(934
)
Other assets
120
(287
)
Accounts payable
(330
)
(1,563
)
Accrued expenses and other liabilities
18,870
162
Operating lease liabilities
(614
)
(1,179
)
Settlement liabilities
10,699
(16,084
)
Other liabilities
(472
)
310
Net cash provided (used) by operating
activities
34,580
(4,392
)
Cash flows from investing activities:
Purchase of property and equipment
(2,602
)
(1,857
)
Software development costs
(4,397
)
(1,051
)
Net cash used by investing activities
(6,999
)
(2,908
)
Cash flows from financing activities:
Principal payments of finance leases
(579
)
(617
)
Principal payments of term loan
(25,157
)
(92
)
Principal payments of line of credit
—
(1,000
)
Proceeds from line of credit
—
9,613
Proceeds from term loan
45,000
—
Payments of deferred offering costs
(4,796
)
—
Vesting of restricted common stock
234
—
Proceeds from issuance of common stock on
exercise of stock options
2,862
559
Net cash provided by financing
activities
17,564
8,463
Net increase in cash and cash
equivalents
45,145
1,163
Cash and cash equivalents and restricted
cash, beginning of period
46,878
34,801
Cash and cash equivalents and restricted
cash, end of period
$
92,023
$
35,964
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
2,182
$
2,186
Cash paid for income taxes
$
6,910
$
101
Noncash investing and financing items:
Right-of-use assets acquired with lease
liabilities
$
—
$
1,260
Accrued deferred offering costs
$
795
$
—
Reconciliation of cash, cash equivalents
and restricted cash to the consolidated balance sheets
Cash and cash equivalents
$
68,058
$
25,881
Restricted cash included in other current
assets
5,989
1,666
Restricted cash included in other
assets
47
45
Restricted cash included in settlement
assets
17,929
8,372
Total cash, cash equivalents and
restricted cash
$
92,023
$
35,964
Expensify, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(unaudited, in thousands)
Adjusted EBITDA
Three months ended September
30,
2021
2020
Net (loss) income
$
(6,345
)
$
(6,938
)
Add:
(Benefit) provision for income taxes
(3,567
)
1,205
Interest and other expenses, net
1,054
646
Depreciation and amortization
1,438
744
Stock-based compensation
897
11,765
Adjusted EBITDA
$
(6,523
)
$
7,422
Adjusted EBITDA Excluding the IPO-Related
Bonus
Three months ended September
30,
2021
2020
Net (loss) income
$
(6,345
)
$
(6,938
)
Add:
(Benefit) provision for income taxes
(3,567
)
1,205
Interest and other expenses, net
1,054
646
Depreciation and amortization
1,438
744
Stock-based compensation
897
11,765
IPO Related Bonuses
26,287
—
Adjusted EBITDA Excluding the IPO-Related
Bonus
$
19,764
$
7,422
Non-GAAP Net Income
Three months ended September
30,
2021
2020
Net (loss) income
$
(6,345
)
$
(6,938
)
Add:
IPO Related Bonuses
26,287
—
Non-GAAP Net (loss) income
$
19,942
$
(6,938
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211216006072/en/
Investor Relations Contact Nick Tooker
investors@expensify.com
Press Contact James Dean press@expensify.com
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