Expensify, Inc.

Hi, welcome to the Q4 2024 and fiscal year 2024 expense by earnings. Before we get started, we're going to kick it over to Nikki, who's going to read the legal disclaimers.

Please note that all the information presented on today's call is unaudited, and during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in forward-looking statements. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. Please refer to today's press release and our filings with the FEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please also note that on today's call, management will refer to certain non-GAAP financial measures. While we believe these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release. or the investor presentation for reconciliation of these non-GAAP financial measures to their most comparable GAAP measures.

Great. Thanks, Nikki. All right, let's get started by reviewing the Q4 2024 financials. Revenue was $37 million. That's a 5% increase both quarter over quarter and year over year, which is great. Love to see revenue go up. Average paid members were $687,000, which is also up slightly. It's essentially flat, but last quarter we were essentially flat and down very slightly. Now we're slightly up, so we'll take slightly up over slightly down. Okay. And interchange was $5.1 million, which is a 62% increase year over year. The car continues to grow at a great clip. It's a bright spot within the company. Operating cash flow was $7.4 million. Free cash flow was $6.3 million. Our net loss was $1.3 million. Almost there to get profitability. Hopefully we'll get there soon. Our non-GAAP net income was $8.7 million. And our adjusted EBITDA was $12.4 million. Now let's talk about fiscal year 2024. Our revenue was 139.2 million. Our average paid members were 686,000. And our interchange was 17.2 million. Our operating cash flow was 23.9 million. Our free cash flow was 23.9 million as well. Those numbers aren't usually equal. There's a reconciliation in the appendix that you can take a look at. It's just coincidence. We double-checked that. We thought it was kind of funny too. Our net loss was $10.1 million. Our non-GAAP net income was $23.5 million. And the adjusted EBITDA was $39.4 million. Great. Now let's dive into free cash flow. For Q4, free cash flow was $6.3 million, a 272% increase year-on-year. For fiscal year 2024, free cash flow was $23.9 million, a 4,200% increase year-on-year. I know that's a large percentage increase. We're just highlighting it to really signal what a night-and-day difference our free cash flow situation is from where we were in 2023. Now let's talk about guidance. So last year, our initial guidance was to pre-cash flow at $10 to $12 million. Obviously, we tremendously outperformed that. That is due to a couple of reasons. One, the company performed significantly better in 2024 than it had in 2023, so that was great. And also, we implemented a lot of efficiency improvements with AI and other things like that. David's going to touch on the AI piece in a moment here. When we look at 2025, our initial guidance is 16 to 20 million, which is obviously significantly higher than it was last year. I do want to note that there's some conservatism baked into this number because we're not sure how the macroeconomic environment is going to play out for our customers. This is a number that we feel good that we can hit even if things don't go great. But as we see these kind of policy changes and everything play out and our confidence grows, we'll update this number accordingly. Now let's talk about the Expensify card. We had strong growth. Expensify card grew 11% quarter-on-quarter to $5.1 million, and Interchange grew 54% year-on-year to $17.2 million. Also, very happy to announce that the card program migration went off without a hitch. We are now fully migrated. The migration is over. We're very happy about that. It simplifies the accounting story, all the energy changes going into revenue, where everyone expects it to be. So this won't be something we need to discuss going forward. Our fiscal year 2024 interchange that was included in revenue was $9.2 million. In Q4, the interchange in revenue was $5 million, and the total interchange for the year was $17.2 million. Now, we always talk about how the latest month went from a paid user's perspective. In January, we had 665,000 paid members, which is lower than we saw in Q4, but that's to be expected. We've highlighted in pink on this chart previous January, so we usually see some significant seasonality in Q1, and we're seeing that again this year. Now let's just talk about some business highlights to round everything off. SquintSight Card, like I said before, it was a great year, grew 54%, producing $17.2 million total interchange, and we fully migrated the card program. Our free cash flow increased year-on-year by $23.3 million compared to fiscal year 2023. We launched Expensify Travel, which adds fee-based and transactional revenue opportunities for the business. We're very excited about this. Customer enthusiasm has been super high, so we look forward to getting you more updates on that in the future. And last but not least, we reduced all of our debt. We paid our debt down by $22.7 million, and we're now debt-free, something we're very proud of.