Expensify Q2 Earnings Call Highlights

Profitability and cash flow improved: Expensify reported $33.9 million in Q2 revenue, $6.4 million in free cash flow and a narrower GAAP net loss. The company raised its 2026 free-cash-flow forecast to $12 million-$14 million from $6 million-$9 million.

New Expensify is growing as Classic declines: Revenue from direct New Expensify customers increased more than 250% year over year to roughly $12 million in annual recurring revenue, while the new platform reached 56% of users. Management cautioned that the timing for growth to fully offset the declining Classic customer base remains uncertain.

Share repurchases and product investments continued: Expensify bought back approximately 6.8 million Class A shares during the quarter, reducing shares outstanding by about 7%, while investing in AI features, card integrations and travel products intended to support future growth.

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.

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.

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 capit...