Expensify, Inc. Q1 FY2026 earnings

Expensify's fiscal 2026 first quarter showed a business still shrinking at the top line while cutting costs hard enough to narrow its losses. Revenue, net fell 6% to $34.0 million for the quarter ended March 31, 2026, from $36.07 million in the prior-year quarter. Management attributed the decline to lower billable activity across the user base and higher contra revenue from cashback payments tied to Expensify Card spend, partly offset by interchange growth. Subscription revenue was $30.9 million, down from $33.2 million a year earlier, while interchange revenue from the Expensify Card rose 10% to $5.5 million. Paid members averaged 632,000, a decrease of 4% from the same period last year.

Gross profit fell 11.4% to $16.2 million from $18.24 million, and gross margin slipped to 47.6% from 50.6%. Cost of revenue, net was essentially flat at $17.8 million. Operating loss widened to $2.0 million from $1.49 million, and operating margin fell to -5.8% from -4.1%. That wider operating loss came even though total operating expenses dropped to $18.1 million from $19.7 million, helped by a $1.7 million, or 16%, reduction in general and administrative costs and a $0.1 million decline in research and development. Sales and marketing rose $0.2 million, or 6%, on higher advertising spend. Below the line, net loss narrowed to $2.3 million from $3.2 million, and diluted EPS improved to -$0.02 from -$0.03. A smaller income tax provision of $0.5 million versus $2.0 million did much of that work.

Cash generation is the weak spot. Operating cash flow was $0.1 million for the quarter, down from $7.9 million a year earlier, hit by lower subscription revenue and the settlement payment tied to the shareholder class action. Free cash flow, a non-GAAP measure, was $2.5 million and includes a $2.6 million one-time payment related to settling that lawsuit. Adjusted EBITDA was $6.2 million, down from $8.4 million, and non-GAAP net income was $3.6 million versus $4.8 million. The balance sheet holds $66.5 million in cash and cash equivalents with no outstanding indebtedness and a $7.5 million letter of credit outstanding. Deferred revenue, current portion only, rose 19.3% to $0.6 million from $0.5 million.

On the product side, Expensify shipped more than 30 improvements during the quarter, spanning merchant rules, GPS mileage tracking, virtual card controls and accountant workflows. It added or renewed partnerships with Xero, ANZ Bank, Kiwibank, the Institute of Commercial Payments, Campfire ERP, Rillet ERP and American Airlines, and expanded its Bring Your Own Card integrations to more than 10,000 banks. Management said April 2026 paid active users rose relative to the Q1 2026 average.

Guidance covers the full fiscal year ending December 31, 2026: free cash flow of $6.0 million to $9.0 million. The company also guided stock-based compensation of $4.7 million to $6.7 million for the second quarter of 2026, with quarterly totals easing to $4.3 million to $6.3 million by the first quarter of 2027. Risks remain familiar. Expensify serves mostly small and medium-sized businesses, so slower economic growth, elevated inflation, tariffs and geopolitical instability could weigh on travel and spending. The filing also flags competition, the ability to retain members, and Nasdaq minimum bid price requirements. With revenue down and paid members shrinking, cost cuts and interchange growth are carrying the profit story for now.