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DATE
Thursday, May 7, 2026 at 5 p.m. ET
CALL PARTICIPANTS
- Chief Financial Officer — Ryan Schaffer
- Chief Executive Officer — David Barrett
- Head of Investor Relations — Niki Wallroth
TAKEAWAYS
- Revenue -- $34 million, reflecting a 6% decrease year over year.
- Average Paid Members -- 632,000, down 4% year over year.
- Interchange Revenue -- $5.5 million, up 10% year over year.
- Operating Cash Flow -- $100,000, with free cash flow of $2.5 million; the latter was impacted by a $2.6 million legal payment related to a class action settlement.
- Free Cash Flow Excluding Legal Payment -- Approximately $5 million if the one-time legal expense is excluded.
- GAAP Net Loss -- $2.3 million for the period.
- Non-GAAP Net Income -- $3.6 million reported for the quarter.
- Adjusted EBITDA -- $6.2 million in the reported quarter.
- Full-Year 2026 Free Cash Flow Guidance -- Management reiterated guidance of $6 million to $9 million.
- April 2026 Paid Active Members -- 641,000, reflecting an increase from the Q1 average and described as "an encouraging sign for the quarter" by Schaffer.
- Platform Migration -- CEO Barrett stated that approximately 60% of classic customers have migrated to the new platform, with migration timing controlled internally.
- Bring-Your-Own-Card (BYOC) Strategy -- Adoption was accelerated, allowing customers to use corporate cards of their choice and simplifying onboarding to Expensify, Inc.
- Partnerships and Integrations -- Expensify renewed its referral program with ANZ at Kiwi Bank, partnered with the Institute of Commercial Payments, and integrated with Campfire, Rillet, and American Airlines for product and ecosystem expansion.
- Product Enhancements -- Over 30 improvements were released in the quarter, including expanded finance workflows, upgraded insights, new Home tab, enhanced client workspaces, AI-driven features, and integration updates.
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RISKS
- CEO Barrett cited performance limitations with the new platform, specifically stating, "The functionality is great and reliable, but it is not fast enough for the larger customers."
- GAAP net loss of $2.3 million and year-over-year revenue decline highlight ongoing top-line pressures.
- A one-time legal payment of $2.6 million impacted reported free cash flow for the quarter.
SUMMARY
Expensify, Inc. (EXFY 8.56%) presented a quarter featuring a 6% revenue decline but offset by growing interchange revenue and solid free cash flow, even after a material legal settlement. Management emphasized strong non-GAAP profitability and signaled increased paid member growth in April, suggesting potential stabilization in the user base. Product development included notable engineering and ecosystem advancements, while over half of classic users have transitioned to the new platform, with migration efforts guided by performance considerations.
- The company is leveraging its BYOC strategy and expanding integration partnerships to reduce adoption friction and increase product stickiness.
- Management characterized the business as positioned for a potential inflection point, pointing to "green-shoot" indicators and a shift to long-term, AI-driven solutions.
- Schaffer reiterated full-year free cash flow guidance, maintaining a conservative outlook and focus on fundamentals amid ongoing transition efforts.
INDUSTRY GLOSSARY
- Interchange Revenue: Fees earned when users transact through corporate or commercial cards linked to the Expensify platform.
- BYOC (Bring-Your-Own-Card): Strategy allowing customers to connect existing corporate credit cards to Expensify's platform, bypassing the need for card replacement to access expense management features.
- ERP: Enterprise Resource Planning systems that integrate core business processes and may connect directly with Expensify through partnerships.
Full Conference Call Transcript
Ryan Schaffer: Thank you, Nikki, and thanks everyone for joining today's call. Let us 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 focused on the fundamentals of the business and on returning to growth. Operating cash flow was $100,000, 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.
So although revenue has declined, profitability is still strong, and that is a key theme for the business right now. As mentioned, we generated $2.5 million in free cash flow this quarter. It is worth noting that we also had a one-time legal payment of $2.6 million related to the class action lawsuit we have since settled. Absent that payment, we would have seen roughly $5 million of free cash flow this quarter. With that said, we remain conservative in our outlook and are reiterating our full-year 2026 free cash flow guidance of $6 million to $9 million. As 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, Inc., and iterating quickly on their feedback. With that, I will hand it over to David for a product update.
David Barrett: Thanks, Ryan. I think the simplest way to frame Q1 is this: we are building a more durable, more profitable business today, setting ourselves up for a much stronger growth story tomorrow. The numbers show the transition, but the product tells you where we are going and how far we have 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, Inc., 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 at Kiwi Bank 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, Inc. with new ERP relationships with Campfire and Rillet, plus a travel integration with American Airlines. The goal is simple: make Expensify, Inc. 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, Inc. 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, CSC member imports, and smarter Home tab alerts.
Taken together, these updates make new Expensify, Inc. 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, Inc. card continued to perform well, with interchange revenue growing to $5.5 million, up 10% year-over-year. We also continued to generate cash, producing positive operating cash flow and $2.5 million of free cash flow in the quarter. At the same time, we are 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 BYO, 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, Inc., reduce adoption friction, expand distribution, and turn the product momentum we are seeing into durable growth. We will now open the call for questions. Thank you to everyone for joining. Let us hop into our Q&A.
Niki Wallroth: Perfect. Mark, I believe you are on the line if you want to open us up for the Q&A.
Analyst: Hi. Can you hear me okay?
Niki Wallroth: Yes.
Analyst: 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.
David Barrett: Sure. This is not a new thing. The whole strategy behind new Expensify, Inc. is to shift away from a more traditional expense management solution toward a more modern, collaborative, AI-focused solution. We knew this was going to be a huge investment and take a long time, and we are at the tail end of that. We have been migrating users over, and we are extremely pleased with the reaction we are getting from classic customers moving to new Expensify, Inc., seeing the new capabilities, the AI, and the collaboration. We are also seeing excitement from new native customers—customers who have never seen Expensify, Inc. Classic.
They come to the product, they get it, they like it, and they really value it. It has validated a lot of our design decisions, and we feel very confident in that. Then there are the green-shoot indicators: April was pretty good from a paid member growth perspective, as we saw. The story has always involved making a difficult but big swing on what we think is still a massive opportunity. There is nothing that has fundamentally changed in the market. I still think there is something like 100 to 1,000 times more opportunity out there than the traditional opportunity has ever seen. New Expensify, Inc. is designed to go out and get it.
We are more and more confident that we can. It is not going to happen overnight, but we are a long-term business, and we have a lot of conviction in that long-term strategy.
Analyst: Great, thanks. And then as a follow-up, maybe if you could just update us on the percentage of your classic customers that have migrated to the new platform.
David Barrett: I think it is about 60%, I would say. Migration is going well. The thing about migration is we control the timeline of it, and we are migrating customers over and paying very close attention to any feedback they have. The most important feedback we have had is simply performance. The functionality is great and reliable, but it is not fast enough for the larger customers. We never want to migrate over a customer if we are not confident they will have a great experience. In general, a lot of our engineering has shifted away from big capital projects and more toward rapidly integrating the specific features that customers request and responding to feedback.
Right now, a big thrust of our engineering is on hardening and improving the performance of our existing functionality in new Expensify, Inc.
Analyst: And then along with that, to date, your migration strategy for the new Expensify, Inc. platform has relied mainly on carrots rather than sticks. With about 60% migration so far, do you plan to shift that approach to move the rest over?
David Barrett: I do not think so. The carrots work well for us. We have the ability to maintain Classic, so we are not backed into a corner. We do not have to push people over. We do it because we think we can give them a better experience. There is no reason to threaten anyone. We want to pull them over with honey rather than vinegar. We have plenty of time to do that and plenty of exciting functionality to pull them over.
In fact, one of the challenges is that we have larger customers who want to come over, and we are saying: the functionality is really powerful and does all this new stuff, but the performance is not there yet. We are experiencing the opposite problem: we have enthusiasm to come over, and it is just not quite there from a performance perspective. That is where a lot of our attention is.
Analyst: Right. That is helpful. Thank you. That is all for me.
Niki Wallroth: I just got confirmation that we were double-booked, so we will speak to our other analysts offline. That is everyone we have live on the call right now.
David Barrett: Great. Thank you, everyone, for dialing in. It is an exciting time for us. We are very excited about where this is going, and we appreciate your time.
Ryan Schaffer: Thank you.
