Summary
Expensify closed fiscal 2021 with fourth-quarter revenue of $40.36 million, up 56.8% from the prior-year quarter. Full-year revenue was $142.84 million, up 62.2% from 2020. Gross profit rose 18.8% to $20.44 million in the quarter and 60.2% to $89.14 million for the year, but margins narrowed sharply. Fourth-quarter gross margin was 50.6%, down 16.2 percentage points from the prior-year quarter. Full-year gross margin was 62.4%, down 0.8 percentage points. The bottom line swung hard negative. Operating income went from a profit in the prior-year quarter to an operating loss of $20.44 million in the fourth quarter. The full-year operating loss was $10.25 million. Net loss was $21.89 million for the quarter, and the full-year net loss was $13.56 million. Diluted EPS for the full year was -$0.36, and the loss widened from 2020. Operating margin was -50.6% in the quarter, down 67.7 percentage points, and -7.2% for the full year, down 13.6 percentage points.
The user base kept recovering. Average paid members reached 711,000 in the quarter ended December 31, 2021, and for the year Expensify averaged 711,000 paid members across 53,000 companies and over 200 countries and territories. Management notes that paid members declined 15% from 742,000 in the quarter ended March 31, 2020 to 633,000 in the quarter ended September 30, 2020, then grew each quarter from March 31, 2021 through December 31, 2021 as COVID-19 restrictions eased. Retention softened, however. Annual gross logo retention was 83% in 2021, down from 86% in 2020. Net seat retention was 93%, down from 96%. The company said the pandemic disrupted SMB customers, cut business travel, and left activity below pre-pandemic levels even as revenue recovered.
Non-GAAP results show how much of the GAAP loss came from stock-based compensation and IPO-related bonus costs. Adjusted EBITDA was $9.5 million for 2021, down from $26.8 million in 2020, and adjusted EBITDA margin fell to 7% from 30%. Non-GAAP net income was $49.4 million for 2021, up from $16.1 million in 2020, with a 35% margin versus 18%. The company completed its initial public offering in November 2021, raising net proceeds of approximately $57.5 million after underwriting discounts and commissions of approximately $4.9 million and offering costs of approximately $8.0 million. Cash flow turned negative in the fourth quarter. Operating cash flow was -$29.09 million, down from positive operating cash flow in the prior-year quarter. Full-year operating cash flow was $5.49 million, down 27.7% from 2020. Capital expenditures were $0.10 million in the quarter, down 83.5%, and $2.71 million for the full year, up 8.8%. Deferred revenue was $0.24 million at December 31, 2021, up from the prior-year end.
Risks remain centered on the pandemic recovery, SMB health, and the company's credit agreement. Expensify ended 2021 not in compliance with all debt covenants, specifically a covenant restricting investments in certain subsidiaries over a threshold, though it obtained a waiver. Management expects to be in compliance with all debt covenants by the end of the fiscal quarter ended March 31, 2022. The loan agreement includes covenants that restrict additional indebtedness, liens, dividends, and acquisitions, and a failure to perform could lead to termination of credit commitments or acceleration of borrowings. Management also states that existing cash resources should be sufficient for continued operations, growth strategy, and additional expenses for at least the next 12 months. The company continues to depend on converting free users into paid members, retaining existing customers, and expanding adoption of the Expensify Card. It has processed and automated over 1.1 billion expense transactions and added over 10 million members since its founding in 2008, but growth in card monetization has taken longer than anticipated.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $40.4M | $37.4M | +7.8% | — | — |
| Gross profit | $20.4M | $19.3M | +6.2% | — | — |
| Gross margin | 50.6% | 51.4% | -0.8 pp | — | — |
| Research & development | $2.9M | $2.2M | +31.5% | — | — |
| Sales & marketing | $13.1M | $7.6M | +72.3% | — | — |
| General & administrative | $24.9M | $18.3M | +35.9% | — | — |
| Total operating expenses | $40.9M | $28.1M | +45.4% | — | — |
| Operating income (loss) | -$20.4M | -$8.9M | -130.7% | — | — |
| Operating margin | -50.6% | -23.6% | -27.0 pp | — | — |
| Net income (loss) | -$21.9M | -$6.3M | -244.9% | — | — |
| Net margin | -54.2% | -16.9% | -37.3 pp | — | — |
| Diluted EPS | -$0.43 | -$0.18 | -$0.25 | — | — |
Risks
COVID-19 disrupted operations and demand, with average paid members declining 15% from 742,000 in the quarter ended March 31, 2020 to 630,000 in the quarter ended June 30, 2020 before rebounding to 711,000 in the quarter ended December 31, 2021. MD&A also notes retention pressure, with annual gross logo retention of 86% in 2020 and 83% in 2021 and net seat retention of 96% in 2020 and 93% in 2021.
Revenue grew 62.2% year over year to $142.84M for FY2021 from $88.07M in FY2020, but operating income swung to a loss of $10.25M for FY2021 from income of $5.67M in FY2020 and net loss widened to $13.56M from $1.71M. In Q4, operating income was a loss of $20.44M versus income of $4.39M in the prior-year quarter, and operating cash flow was negative $29.09M versus positive $11.98M.
Gross margin fell to 50.6% in Q4 from 66.8% in the prior-year quarter, down 16.2 pp, and operating margin fell to -50.6% from 17.1%, down 67.7 pp. MD&A attributes higher costs partly to discretionary cash bonuses, including $48.4M of IPO-related bonus expense in FY2021, which increased cost of revenue and operating expenses.
Expensify Card relies on a single third-party vendor Marqeta, issuing bank Sutton Bank, and card network Visa; the Marqeta agreement has a three-year term expiring in June 2022 and either party can terminate without cause upon 180 days' notice. Consideration from this vendor reduced cost of revenue by $2.9M in FY2021 and $1.0M in FY2020, so losing these services could interrupt card operations and delay growth.
A majority of subscriptions are driven by the expense management feature, making market acceptance of that feature critical; the company recently increased subscription prices and does not know if the increases will adversely affect the business. Failure to convert free users or meet demand for expense management could harm growth.
Expensify Payments is a licensed money transmitter in various U.S. states and territories and is seeking additional licenses; this subjects it to money transmitter statutes, ongoing compliance obligations, and potential fines. The filing states regulators have previously identified violations or alleged violations and imposed fines, and future noncompliance could force business restrictions, additional licensure, or product changes.
Success depends on senior management, including founder and CEO David Barrett, and on a single professional services firm for a significant portion of the finance function. Losing the outsourced finance team could seriously harm key accounting processes and timely accurate financial reporting and could lead to material weaknesses in disclosure controls and internal control over financial reporting.
As of December 31, 2021, the company was not in compliance with a CIBC loan covenant restricting investments in certain subsidiaries over a free cash flow threshold, though it obtained a waiver and expects compliance by the end of the quarter ended March 31, 2022. It had $67.8M in outstanding indebtedness and covenants restrict additional debt, liens, dividends, and acquisitions.
As of December 31, 2021, businesses with fewer than 1,000 employees accounted for approximately 95% of customers by revenue, and the company focuses on VSBs and SMBs. These customers may be more susceptible to economic downturns, price sensitivity, and reduced business spending, which could decrease revenue.
Faces significant competition from larger horizontal platform providers such as Intuit, Oracle NetSuite, SAP Concur, and Workday, and from expense management and corporate card providers including Bill.com (Divvy), Brex, Ramp, and others. Increased competition may impact the ability to add new customers at historical rates and may pressure pricing.
The Voting Trust controls a majority of voting power, and the company qualifies as a controlled company relying on Nasdaq exemptions, so it does not have a majority of independent directors, does not have a nominating and corporate governance committee, and its compensation committee members are not independent. This limits stockholder protections and concentrated control may delay or prevent a change of control.
Approximately 64,739,010 shares of Class A common stock become eligible for sale upon expiration of the 180-day lock-up period after November 9, 2021, and future sales or issuance of common stock could cause the share price to fall and dilute stockholders. As of December 31, 2021, the company had 67,844,060 Class A shares, 7,332,640 LT10 shares, and 6,224,160 LT50 shares outstanding.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from Expensify, Inc.'s SEC filings for Q4 FY2021 (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 6, 2026.