Expensify, Inc. Q2 FY2025 earnings call

• F1 Movie: Expensify was on screen for over 35 minutes, logo viewable for an estimated 1.3 billion minutes, estimated $100M+ spent on marketing, earned media value of $61M. Brand awareness saw over 50% increase in core demographic (18-54) and 350% increase in 18-24 demographic. • Financials: Free cash flow guidance updated. • Product: Concierge AI with multimodal capabilities and tree-of-thought design in development. Expensify Travel up 44% last quarter. Technology platform upgraded to real-time infrastructure, chat-centric design, cross-platform functionality. Migration of customers from classic to new Expensify a priority. • Long-term strategy: Positive cash flow generation for share repurchase and investor returns.

Revenue was $35.8 million, up year-on-year. Average paid members were 652,000. Total interchange was $5.3 million, up year-on-year. Operating cash flow was $8.9 million. Free cash flow was $6.3 million, a 10% increase from last year. Net loss was $8.8 million. Non-GAAP net loss was $1.9 million. Adjusted EBITDA was a negative $1.4 million. Free cash flow guidance has been increased to $19 million to $23 million from the previous $17 million to $21 million. July payment members were 641,000, showing seasonality.

• Previously updated annual free cash flow guidance to $17M - $21M. • Now increased free cash flow guidance to $19M - $23M. • Confidence in this number grows as the year progresses, with updates expected next quarter.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ. • Non-GAAP financial measures not to be considered in isolation. • Movie accounting impact on financials this quarter, but expected to return to normal next quarter.

Q: About the F1 Movie's impact on converting to paying users, with the movie releasing near the end of Q2, when to expect impact?

A: Impact from the movie will be in the future as it's a long-term brand awareness play with a halo effect.

Q: Relevant to Google search algorithm changes and SEO for marketing?

A: Expensify has strong SEO, ranks highly in AI tools like ChatGPT, and is optimizing for chat-based AIs.

Q: R&D allocation and potential erosion of moat with AI?

A: R&D focused on integrated technology. AI application is seen as not eroding moat but requiring different approach; Expensify's deep AI integration is unique.

Q: New customer adds from F1 and follow-on marketing plans?

A: No Q2 data on F1-related new customers, but more marketing plans in place beyond the F1 movie.

Q: Color on Expensify Travel?

A: Expensify Travel up 44% last quarter, growing well with customer enthusiasm, with sales cycle involving demos, pilots, and rollout.