Summary
Expensify closed the March quarter with revenue of $40.4 million, up 35.8% from the prior-year quarter. Gross profit rose 18.8% to $26.2 million. Gross margin fell to 65.0% from 74.3%, a decline of 9.3 percentage points. The company swung to an operating loss of $4.8 million, down from operating income of $11.5 million a year earlier. Operating margin went from 38.8% to -12.0%, down 50.8 percentage points. Net loss was $7.4 million, compared with net income of $8.0 million in the prior-year quarter. Diluted loss per share was $0.09, down from diluted earnings per share of $0.06. Management tied the net loss to stock-based compensation of $14.7 million.
Cash generation stayed positive. Operating cash flow was $11.2 million, up 13.3% from $9.9 million in the prior-year quarter. Capital expenditures were $0.18 million, down from $0.28 million. Deferred revenue, current portion only, stood at $0.21 million. That cash figure contrasts with the GAAP net loss and benefited from changes in settlement liabilities and other working capital items, according to the 10-Q. Revenue growth came from more paid members, higher reimbursement activity, and a shift toward pay-per-use members, who carry a higher average fee than annual members, the 10-Q said. Expensify also announced a share repurchase program of up to $50 million of Class A common stock. The program aims to offset dilution and reduce share count over time, and it has no termination date.
Operational metrics showed momentum on the free side of the business. The Free Plan grew to more than 9,000 customers, a 183% increase from the previous quarter. The plan bundles the Expensify Card, expense management, next-day reimbursement, invoicing, bill pay, and travel booking at no charge. Average paid members for the quarter were 706,000, up from 633,000 in the prior-year quarter. Management said the second best month in company history from a paid member perspective came during the quarter, and that the COVID-19 Omicron spike early in the year held back the start of the period. Expensify Card interchange increased by 150% from the same period last year. The company also introduced the CPA Card in January, a card designed for CPAs and accounting firms. These metrics suggest user growth is broadening, but conversion of free users into paying customers remains the open question.
Non-GAAP profitability declined year over year even as revenue grew. Adjusted EBITDA was $11.0 million with a 27% margin, compared with $13.4 million and a 45% margin in the prior-year quarter. Non-GAAP net income was $7.3 million with an 18% margin, compared with $8.8 million and a 29% margin. The gap between GAAP and non-GAAP results is wide because non-GAAP figures exclude stock-based compensation. Expensify reaffirmed its long-term guidance of 25-35% revenue growth over a multi-year period. Management did not give specific quarterly revenue guidance but pointed to that multi-year range and to expected stock-based compensation costs for the rest of the fiscal year.
Risks remain substantial. The COVID-19 pandemic continues to affect SMB customers and business travel, though the company has seen some recovery. The war in Ukraine and related geopolitical tensions add uncertainty. Expensify faces the challenge of attracting and retaining members, expanding platform usage, and converting free users into paying customers. Competition could pressure pricing and growth. The company also carries debt and is subject to loan covenants that restrict dividends, distributions, and other actions; the repurchase program is subject to those restrictions. Stock-based compensation is expected to remain a significant expense and a source of dilution, with quarterly estimates ranging from a low of $10.0 million to a high of $16.0 million. Management believes existing cash resources will fund operations for at least the next 12 months, but the outlook depends on revenue growth and cost control.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $40.4M | $40.4M | +0.0% | — | — |
| Gross profit | $26.2M | $20.4M | +28.4% | — | — |
| Gross margin | 65.0% | 50.6% | +14.3 pp | — | — |
| Research & development | $3.7M | $2.9M | +29.9% | — | — |
| Sales & marketing | $13.4M | $13.1M | +2.0% | — | — |
| General & administrative | $14.0M | $24.9M | -43.8% | — | — |
| Total operating expenses | $31.1M | $40.9M | -24.0% | — | — |
| Operating income (loss) | -$4.8M | -$20.4M | +76.3% | — | — |
| Operating margin | -12.0% | -50.6% | +38.6 pp | — | — |
| Net income (loss) | -$7.4M | -$21.9M | +66.3% | — | — |
| Net margin | -18.3% | -54.2% | +36.0 pp | — | — |
| Diluted EPS | -$0.09 | -$0.43 | +$0.34 | — | — |
| Customers | 9,000 | — | — | — | — |
Risks
Stock-based compensation expense increased to $14.7 million in the three months ended March 31, 2022 from $0.7 million in the prior-year period, contributing to operating income swinging to a loss of $4.84 million and net loss of $7.38 million. Gross margin also decreased to 65.0% in the quarter from 74.3% in the prior-year quarter, a decline of 9.3 percentage points.
The COVID-19 pandemic disrupted SMB customers and curtailed business travel, a significant driver of expenses on the platform. Average paid members declined 15% from 742,000 in the quarter ended March 31, 2020 to 633,000 in the quarter ended September 30, 2020, and although they rebounded to 706,000 in the quarter ended March 31, 2022, activity remains lower than pre-pandemic levels.
Monetization from the Expensify Card has taken longer than anticipated due to pandemic-related declines in expense volume and customer reluctance to adopt a new card. Adoption is increasing, but the delay could affect growth from card transaction monetization.
We had $67.7 million in outstanding indebtedness as of March 31, 2022 and are subject to financial covenants, including a total annual recurring revenue leverage ratio and minimum liquidity. Failure to comply could allow CIBC to terminate commitments and declare outstanding borrowings immediately due and payable.
Sales and marketing expenses increased 335% for the three months ended March 31, 2022 compared to the prior-year period, driven by increased advertising spend and employee focus on recently developed products such as the Free Plan and Expensify Card. General and administrative expenses increased 120% over the same period due to public company costs.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA margin
Non-GAAP net income
Non-GAAP net income margin
Summary, forecast, risks and KPIs are extracted from Expensify, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.