# Expensify, Inc.: Form 10-Q for the period ended Sep 30, 2025

- Company: [Expensify, Inc.](/companies/exfy.md) (CIK 1476840)
- Form: 10-Q
- Filed: 2025-11-06
- Accepted by EDGAR: Nov 6, 2025, 16:27 ET
- Period: 2025-09-30
- Accession: 0001476840-25-000137
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1476840/000147684025000137/exfy-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1476840/000147684025000137/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $35.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $106.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-07-01 to 2025-09-30 | $17.7m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2025-01-01 to 2025-09-30 | $52.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-07-01 to 2025-09-30 | $17.4m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2025-01-01 to 2025-09-30 | $54.2m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-07-01 to 2025-09-30 | $4.9m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2025-01-01 to 2025-09-30 | $15.4m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-07-01 to 2025-09-30 | −$2.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-01-01 to 2025-09-30 | −$14.1m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $154.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | $1.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | −$2.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | −$14.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.03 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.15 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.03 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.15 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 92,559,381 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 92,114,672 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $17.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $17.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2025-01-01 to 2025-09-30 | $6.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-09-30 | $61.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-09-30 | $152.6m | us-gaap:AssetsCurrent |
| Total assets | at 2025-09-30 | $186.8m | us-gaap:Assets |
| Current liabilities | at 2025-09-30 | $44.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-09-30 | $51.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-09-30 | $135.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 46,726 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report"). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A. "Risk Factors" in our 2024 Annual Report and included elsewhere in this Quarterly Report on Form 10-Q. See "Special Note Regarding Forward-Looking Statements."*

### OVERVIEW

Expensify is a cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. Every day, people from all walks of life in organizations around the world use Expensify to scan and reimburse receipts from flights, hotels, coffee shops, office supplies and ride shares. Since our founding in 2008, we have added over 15 million members to our community and processed and automated 1.8 billion expense transactions on our platform as of September 30, 2025, freeing people to spend less time managing expenses and more time doing the things they love. For the quarter ended September 30, 2025, an average of 642,000 paid members across an average of 38,800 companies and over 200 countries and territories used Expensify to make money easy.

### MACROECONOMIC TRENDS

Our business and the operations of our customers, the majority of which are small and medium-sized businesses, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and a potential for a recession. Although certain indicators have suggested that inflation has made downward progress, the economy continues to be impacted by elevated inflation rates and faces further inflation risk. Tariff and trade issues also continue to cause overall uncertainty with respect to the economy. See Part I, Item 1A. "Risk Factors" in our 2024 Annual Report and our subsequent filings for further discussion of the possible impact of such macroeconomic trends on our business. Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business.

### Components of Results of Operations

### Revenue

We generate revenue from subscription fees based on the usage of our cloud-based expense management software platform under arrangements paid monthly in arrears that are either (i) month-to-month and can be terminated by either party without penalty at any time or (ii) annual arrangements based on a minimum number of monthly members. Annual subscription customers who wish to terminate their contracts before the end of the term are required to pay the remaining obligation in full plus any fees or penalties set forth in the agreement. We charge our customers subscription fees for access to our platform primarily based on the number of monthly active members and level of service. The contractual price is based on either negotiated fees or rates published on our website. We generate most of our revenue from customers who have a credit card or debit card on file with us that is automatically charged each month. Virtually all of our customers have a standard terms of service contract, with the few exceptions for customers on bespoke service contracts.

Our contracts with our customers include two performance obligations: access to the hosted software service, inclusive of all features available within the platform, and the related customer support. We account for the platform access and the support as a combined performance obligation because they have the same pattern of transfer over the same period and are therefore delivered concurrently. We satisfy our performance obligation over time each month as we provide platform access and support services to customers and as such recognize revenue over time. We recognize revenue net of applicable taxes imposed on the related transaction.

As of September 30, 2025, the Expensify Card substantially consisted of a single card program that launched in February 2024 (the "Updated Card Program"). The Updated Card Program operates under an agreement with the issuing bank, The Bancorp Bank, N.A. ("Bancorp"), to issue Expensify Cards to customers and authorize and settle transactions on the Visa card network.

Under the Updated Card Program, we generate revenue from the authorization and settlement of Expensify Card transactions and are contractually entitled to all interchange generated on Expensify Card transactions based on our agreement with Bancorp. We are the principal in the transaction and recognize interchange as revenue on a gross basis within Revenue on the Condensed Consolidated Statements of Operations. Interchange revenue was $5.4 million and $3.7 million for the three months ended September 30, 2025 and 2024, respectively. Interchange revenue was $15.7 million and $4.2 million for the nine months ended September 30, 2025 and 2024, respectively.

We offer a cashback rewards program to all customers on the Updated Card Program based on volume of Expensify Card transactions. Cashback rewards are earned on a monthly basis and are applied against outstanding customer receivables or are paid out the following month. We consider our cashback rewards as consideration payable to a customer, and they are recorded as contra revenue within Revenue on the Condensed Consolidated Statements of Operations. Cashback rewards applied against outstanding customer receivables are reflected as a reduction to Accounts receivable, net on the Condensed Consolidated Balance Sheets. Cashback rewards liability is recorded within Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. The cashback rewards fluctuate over time as customers meet eligibility requirements and based on the timing of payments made to customers. Cashback rewards were $2.6 million and $2.3 million for the three months ended September 30, 2025 and 2024, respectively. Cashback rewards were $7.3 million and $6.4 million for the nine months ended September 30, 2025 and 2024, respectively.

### Cost of Revenue, Net

Cost of revenue, net primarily consists of expenses related to hosting our service, including the costs of data center capacity, credit card processing fees, third-party software license fees, outsourcing engineering costs to maintain our platform, outsourcing costs to support customer service and outsourcing costs to support our patented scanning technology SmartScan, net of consideration from a vendor under the Updated Card Program for certain volume-based incentives from Visa and consideration from a vendor under our previous card program (the "Legacy Card Program"), which an immaterial number of cardholders continue to operate within, for monetizing Expensify Card activities. Additional costs include amortization of finance right-of-use assets, amortization expense on capitalized software development costs and personnel-related expenses, including stock-based compensation and employee costs attributable to supporting our customers and maintenance of our platform.

Under the Updated Card Program, we receive consideration from a vendor for certain volume-based incentives from Visa, which are included as a reduction to Cost of revenue, net on the Condensed Consolidated Statements of Operations as they are earned. The amounts earned under these volume-based incentives were $0.3 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively. The amounts earned under these volume-based incentives were $1.3 million and $0.1 million for the nine months ended September 30, 2025 and 2024, respectively.

The Legacy Card Program operates under an agreement with the payment processor, Marqeta, Inc. ("Marqeta"), and relies on Marqeta to manage the relationship with the issuing bank, Sutton Bank, and the card network, Visa, in authorizing and settling transactions. The vendor is contractually entitled to the interchange through its relationships with the card network and card issuing bank. The vendor keeps a portion of the interchange for their services, and our agreement with the vendor results in us receiving the remainder of the interchange. This consideration, net of fees paid to the vendor, is included as a reduction to Cost of revenue, net on the Condensed Consolidated Statements of Operations as it is earned. Consideration earned under the Legacy Card Program, net was immaterial for both the three and nine months ended September 30, 2025. Consideration earned under the Legacy Card Program was $0.8 million, net of $0.1 million of fees paid to the vendor, for the three months ended September 30, 2024. Consideration earned under the Legacy Card Program was $7.1 million, net of $0.8 million of fees paid to the vendor, for the nine months ended September 30, 2024.

### OPERATING EXPENSES

### Research and Development

Research and development expenses consist primarily of personnel-related expenses, including stock-based compensation, and external contributor costs incurred related to the planning and preliminary project stage of new products or enhancing existing products or services. We capitalize certain software development costs that are attributable to developing or adding significant functionality to our internal-use software during the application development stage of the projects. All research and development expenses, excluding capitalized software development costs, are expensed as incurred.

We believe delivering new functionality is critical to attract new customers and expand our relationships with existing customers. We expect to continue to make investments in and expand our product and service offerings to enhance our customers’ experience and satisfaction and to attract new customers.

### General and Administrative

General and administrative expenses primarily consist of personnel-related expenses, including stock-based compensation, for any employee time allocated to administrative functions, including finance and accounting, legal and compliance, and human resources. In addition to personnel-related expenses, general and administrative expenses consist of business insurance, rent, utilities, depreciation, amortization of operating right-of-use assets, information technology and external professional services, including finance and accounting, audit, tax, legal and compliance, and human resources.

### Sales and Marketing

Sales and marketing expenses primarily consist of personnel-related expenses, including stock-based compensation, advertising expenses, depreciation, outsourcing costs for sales and product demos, branding and public relations expenses, referral fees for strategic partners and other benefits that we provide to our referral and affiliate partners.

### Other Income (Expenses), Net

Other income (expenses), net, consists of the results of operations of our Fifth & Harvey, LLC subsidiary, which holds title to and manages operations of the operating lease for lots in Portland, Oregon that are currently used to host multiple portable food vendors open to the general public, as well as interest income, realized gains and losses on foreign currency transactions, foreign currency remeasurement, and interest paid under our credit facilities with Canadian Imperial Bank of Commerce ("CIBC"). See “Liquidity and Capital Resources—Credit Facilities.”

### Provision for Income Taxes

Income taxes primarily consist of income taxes in the United States, United Kingdom, Australia, Netherlands and Canada, as well as states in the United States in which we do business.

On July 4, 2025, H.R.1 was enacted into law, which includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6%. The legislation has multiple effective dates, with certain provisions effective for the 2025 tax year and others being implemented through 2027. We evaluated the changes enacted during the quarter and have estimated their impact, which is reflected in the accompanying condensed consolidated financial statements. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

### Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table sets forth our results of operations for each of the periods presented:

*(in thousands, except percentages, share and per share data)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $35,065 | $35,409 | $106,903 | $102,232 |
| Cost of revenue, net(1) | 17,667 | 17,145 | 52,686 | 46,091 |
| Gross margin | 17,398 | 18,264 | 54,217 | 56,141 |
| Operating expenses: |  |  |  |  |
| Research and development(1) | 4,905 | 5,618 | 15,421 | 17,936 |
| General and administrative(1) | 9,814 | 9,084 | 30,054 | 29,760 |
| Sales and marketing(1) | 4,936 | 3,274 | 22,824 | 9,730 |
| Total operating expenses | 19,655 | 17,976 | 68,299 | 57,426 |
| (Loss) income from operations | (2,257) | 288 | (14,082) | (1,285) |
| Other income (expenses), net | 96 | 181 | 1,309 | (1,033) |
| (Loss) income before income taxes | (2,161) | 469 | (12,773) | (2,318) |
| Provision for income taxes | (154) | (2,667) | (1,499) | (6,425) |
| Net loss | $(2,315) | $(2,198) | $(14,272) | $(8,743) |
| Net loss per share: |  |  |  |  |
| Basic and diluted | $(0.03) | $(0.02) | $(0.15) | $(0.10) |
| Weighted average shares of common stock used to compute net loss per share: |  |  |  |  |
| Basic and diluted | 92,559,381 | 88,177,739 | 92,114,672 | 86,643,209 |
| Net loss margin | (7)% | (6)% | (13)% | (9)% |

(1) Includes stock-based compensation expense as follows:

*(in thousands)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenue, net | $2,630 | $2,843 | $8,439 | $8,661 |
| Research and development | 1,881 | 2,530 | 6,301 | 8,424 |
| General and administrative | 1,147 | 1,560 | 3,897 | 4,965 |
| Sales and marketing | 1,005 | 697 | 2,943 | 1,485 |
| Total stock-based compensation expense | $6,663 | $7,630 | $21,580 | $23,535 |

29

### COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

### Revenue

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $35,065 | $35,409 | $(344) | (1)% |

Revenue decreased by $0.3 million, or 1%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) a decrease in billable activity across our user base, and (ii) an increase in contra revenue related to cashback payments driven by the increased adoption and spend captured from members using the Expensify Card. This decrease was partially offset by an increase in interchange revenue driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program.

### Cost of Revenue, Net and Gross Margin

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenue, net | $17,667 | $17,145 | $522 | 3% |
| Gross margin | $17,398 | $18,264 | $(866) | (5)% |
| Gross margin % | 50% | 52% |  |  |

Cost of revenue, net increased by $0.5 million, or 3%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) a decrease in consideration earned under the Legacy Card Program driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program, (ii) an increase in payment processing fees, and (iii) an increase in amortization expense related to capitalized software. This increase was partially offset by a decrease in SmartScan costs due to increased use of AI instead of human agents.

Gross margin decreased to 50% for the three months ended September 30, 2025 compared to 52% in the same period in 2024 due to the factors described in the preceding paragraphs for Revenue and Cost of revenue, net.

### OPERATING EXPENSES

### Research and Development

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $4,905 | $5,618 | $(713) | (13)% |

Research and development expenses decreased by $0.7 million, or 13%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a decrease in internal employee and external contributor time spent on project initiatives and new product features as a result of increased focus on sales and marketing efforts related to our title sponsorship of *F1® The Movie*, which was released in theaters in June 2025.

### General and Administrative

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative | $9,814 | $9,084 | $730 | 8% |

General and administrative expenses increased by $0.7 million, or 8%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) an increase in legal fees, and (ii) settlement losses, net of recoveries. This increase was partially offset by a decrease in business insurance.

### Sales and Marketing

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing | $4,936 | $3,274 | $1,662 | 51% |

Sales and marketing expenses increased by $1.7 million, or 51%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) an increase in time spent on sales and marketing activities, and (ii) an increase in advertising spend related to our title sponsorship of *F1® The Movie*, which was released in theaters in June 2025.

### Other income, net

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | $96 | $181 | $(85) | (47)% |

Other income, net changed by $0.1 million, or 47%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to period-over-period unfavorability in net foreign currency gains/losses, partially offset by an increase in interest income.

### Provision for Income Taxes

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes | $(154) | $(2,667) | $2,513 | (94)% |

We recorded a provision for income taxes of $0.2 million during the three months ended September 30, 2025 compared to a provision for income taxes of $2.7 million for the same period in 2024.

During the three months ended September 30, 2025 and 2024, our effective income tax rate was (7.1)% and 568.7%, respectively. The effective income tax rate differs from the statutory rate in 2025 and 2024 primarily due to non-deductible stock-based compensation.

### COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

### Revenue

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $106,903 | $102,232 | $4,671 | 5% |

Revenue increased by $4.7 million, or 5%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to an increase in interchange revenue driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program. This increase was partially offset by (i) a decrease in billable activity across our user base, including a decrease in pay-per-use billable activity which has a higher average fee per member than our annual members, and (ii) an increase in contra revenue related to cashback payments driven by the increased adoption and spend captured from members using the Expensify Card.

### Cost of Revenue, Net and Gross Margin

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenue, net | $52,686 | $46,091 | $6,595 | 14% |
| Gross margin | $54,217 | $56,141 | $(1,924) | (3)% |
| Gross margin % | 51% | 55% |  |  |

Cost of revenue, net increased by $6.6 million, or 14%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) a decrease in consideration earned under the Legacy Card Program driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program, (ii) an increase in payment processing fees, and (iii) an increase in amortization expense related to capitalized software. This increase was partially offset by a decrease in SmartScan costs due to increased use of AI instead of human agents.

Gross margin decreased to 51% for the nine months ended September 30, 2025 compared to 55% in the same period in 2024 due to the factors described in the preceding paragraphs for Revenue and Cost of revenue, net.

### Research and Development

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $15,421 | $17,936 | $(2,515) | (14)% |

Research and development expenses decreased by $2.5 million, or 14%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to a decrease in internal employee and external contributor time spent on project initiatives and new product features as a result of increased focus on sales and marketing efforts related to our title sponsorship of *F1® The Movie*, which was released in theaters in June 2025.

### General and Administrative

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative | $30,054 | $29,760 | $294 | 1% |

General and administrative expenses increased by $0.3 million, or 1%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) an increase in legal fees, and (ii) settlement losses, net of recoveries. This increase was partially offset by a decrease in business insurance.

### Sales and Marketing

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing | $22,824 | $9,730 | $13,094 | 135% |

Sales and marketing expenses increased by $13.1 million, or 135%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) an increase in time spent on sales and marketing activities, and (ii) an increase in advertising spend related to our title sponsorship of *F1® The Movie*, which was released in theaters in June 2025.

### Other income (expenses), net

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Other income (expenses), net | $1,309 | $(1,033) | $2,342 | (227)% |

Other income (expenses), net changed by $2.3 million, or 227%, for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to (i) a period-over-period favorability in net foreign currency gains/losses, (ii) a decrease in interest expense incurred due to the repayments of the revolving line of credit and amortizing term mortgage discussed below under “Liquidity and Capital Resources—Credit Facilities”, and (iii) an increase in interest income.

### Provision for Income Taxes

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes | $(1,499) | $(6,425) | $4,926 | (77)% |

We recorded a provision for income taxes of $1.5 million during the nine months ended September 30, 2025 compared to a provision for income taxes of $6.4 million for the same period in 2024.

Our effective income tax rate was (11.7)% and (277.2)% during the nine months ended September 30, 2025 and 2024, respectively. The effective income tax rate differs from the statutory rate in 2025 and 2024 primarily due to non-deductible stock-based compensation.

### Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through our cash flow from operations, sales of our equity securities and borrowings under our credit facilities. As of September 30, 2025, we had $61.5 million in cash and cash equivalents, with no outstanding indebtedness and a $7.5 million letter of credit outstanding.

Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support growth in our business and our need to respond to business opportunities, challenges or unforeseen circumstances. We believe that our existing cash resources will be sufficient to finance our continued operations and growth strategy for the next 12 months and for the foreseeable future.

### CASH FLOWS

The following table summarizes our cash flows for the periods indicated:

*(in thousands)*

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $17,887 | $16,475 |
| Net cash used in investing activities | (2,757) | (6,699) |
| Net cash used in financing activities | (1,583) | (21,180) |
| Net increase (decrease) in cash and cash equivalents and restricted cash | $13,547 | $(11,404) |

### CASH FLOWS FROM OPERATING ACTIVITIES

Net cash provided by operating activities was $17.9 million for the nine months ended September 30, 2025 compared to $16.5 million for the same period in 2024, primarily due to (i) an increase in interchange revenue driven by the increased adoption and spend captured from members using the Expensify Card, and (ii) a decrease in SmartScan costs. This increase was partially offset by (i) a decrease in subscription revenue, (ii) an increase in marketing and advertising spend related to our title sponsorship of *F1® The Movie*, which was released in theaters in June 2025, and (iii) an increase in settlement losses, net of recoveries.

### CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities was $2.8 million for the nine months ended September 30, 2025, primarily consisting of software development costs.

Net cash used in investing activities decreased for the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to a decrease in employee and external contributor software development costs.

### CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in financing activities was $1.6 million for the nine months ended September 30, 2025, primarily consisting of the repurchase and retirement of common stock, partially offset by proceeds from common stock purchased under the 2021 Stock Purchase and Matching Plan (the "Matching Plan").

During the nine months ended September 30, 2024, net cash used for financing activities primarily consisted of (i) the repayment of the revolving line of credit and the amortizing term mortgage, and (ii) the repurchase and retirement of common stock. This was partially offset by proceeds from common stock purchased under the Matching Plan.

### SHARE REPURCHASE PROGRAM

On May 10, 2022, the Executive Committee of the Board of Directors (the "Executive Committee") approved a share repurchase program with authorization to purchase up to $50.0 million of shares of Class A common stock ("2022 Share Repurchase Program"). The 2022 Share Repurchase Program authorized us to repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in accordance with applicable securities laws and other restrictions. The 2022 Share Repurchase Program, which would have expired in March 2025, was replaced with the 2025 Share Repurchase Program described below.

On February 25, 2025, the Executive Committee approved a new share repurchase program with authorization to purchase up to $50.0 million of shares of Class A common stock that expires on March 31, 2028 ("2025 Share Repurchase Program"). Under the 2025 Share Repurchase Program, we may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, in accordance with applicable securities laws and other restrictions. The actual timing and total amount of future repurchases are subject to business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, restrictions under the terms of our current and future debt agreements and other considerations. The 2025 Share Repurchase Program does not obligate us to acquire any particular amount of Class A common stock, and the program may be suspended or terminated at any time by us at any time at our discretion without prior notice.

As of September 30, 2025, we had $44.0 million remaining under the 2025 Share Repurchase Program, not including amounts used for net share settlement of vested equity incentive awards. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.

### CREDIT FACILITIES

### Amortizing Term Mortgage

In August 2019, we entered into an $8.3 million amortizing term mortgage agreement with CIBC for our commercial building located in Portland, Oregon. The agreement required principal and interest payments due each month over a five-year period. Interest accrued at a fixed rate of 5.00% per year until August 2024, at which point the remaining outstanding principal balance on the amortizing term mortgage was due in full. The borrowings were secured by the building. On August 29, 2024, we repaid in full the then-outstanding balance of $7.6 million and an immaterial amount of accrued interest and terminated the associated mortgage agreement with CIBC and secured promissory note. See Note 4 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.

### Loan and Security Agreement

In February 2024, we entered into a Second Amended and Restated Loan and Security Agreement (as amended by the amendments described below, the "2024 Amended Loan and Security Agreement") with CIBC. The 2024 Amended Loan and Security Agreement provided for a $25.0 million revolving credit facility that was set to expire in September 2025. Borrowings under the revolving line of credit accrued interest at CIBC’s reference rate plus 1.00% and were secured by substantially all of our assets.

In April 2024, we entered into an irrevocable standby letter of credit (the "Letter of Credit") issued under the 2024 Amended Loan and Security Agreement to reduce cash collateral requirements in connection with the Updated Card Program. The Letter of Credit was issued in the amount of $1.0 million for the benefit of Bancorp. The Letter of Credit was renewed on February 28, 2025 and expires on March 20, 2026. On April 16, 2025, we entered into an amendment to the irrevocable standby letter of credit to increase the Letter of Credit to $7.5 million. No amounts had been drawn on the Letter of Credit as of September 30, 2025.

In May 2024, we entered into a First Amendment to the 2024 Amended Loan and Security Agreement, which amended the covenant restricting the amount of repurchases of common stock to allow for certain additional repurchase activity and provided a waiver for our non-compliance during prior periods with the previous version of such covenant.

On July 10, 2024, the then-outstanding balance of $15.0 million and an immaterial amount of accrued interest on the revolving line of credit were repaid in full.

In August 2024, we entered into a Second Amendment to the 2024 Amended Loan and Security Agreement, which permitted our wholly-owned subsidiary, 401 SW 5th Ave LLC, to remain an excluded subsidiary provided that the subsidiary does not engage in any operations or activities except to maintain legal existence and ownership of the real property or any related activities thereto, does not hold assets other than real estate assets, and does not incur any indebtedness except for intercompany liabilities permitted under the agreement or grant any liens.

In February 2025, we entered into a Third Amendment to the 2024 Amended Loan and Security Agreement, which amended the covenant restricting the amount of repurchases of common stock, which includes net share settlements of stock-based awards, to allow for certain additional net share settlement activity.

On July 1, 2025, we terminated the revolving credit facility under our 2024 Amended Loan and Security Agreement. At the time of such termination, we had no borrowings under the revolving line of credit, and certain terms, including collateral security, survived the termination with respect to outstanding Contingent Obligations (as defined in the 2024 Amended Loan and Security Agreement) arising from Bank Services (as defined in the 2024 Amended Loan and Security Agreement). The Letter of Credit, which had no amounts drawn, also remained outstanding. We incurred no penalties as a result of the termination of the revolving credit facility.

### Letter of Credit Security Agreement

On October 9, 2025, we entered into a Letter of Credit Facility and Security Agreement (the “LOC Security Agreement”) with CIBC. Following the termination of the revolving credit facility under the 2024 Amended Loan and Security Agreement on July 1, 2025, certain terms of the agreement survived the termination, including collateral security, and the Letter of Credit originally issued under the 2024 Amended Loan and Security Agreement remained outstanding. The LOC Security Agreement, among other things, provides for the issuance of additional irrevocable standby letters of credit, governs the terms of the Letter of Credit, and grants to CIBC, for the ratable benefit of the lenders, a security interest in substantially all of our assets, and replaces the 2024 Amended Loan and Security Agreement with respect to the Contingent Obligations. Under the LOC Security Agreement, the Letter of Credit remained at $7.5 million with an expiration date of March 20, 2026 under the LOC Security Agreement. No amounts had been drawn on the Letter of Credit as of October 9, 2025.

### Certain Covenants

As of October 9, 2025, we are subject to customary covenants under the LOC Security Agreement which, unless waived by CIBC, restrict our and our subsidiaries’ ability to, among other things, incur certain additional indebtedness, create or incur certain liens, permit a change of control, sell or transfer assets, pay dividends or make distributions, subject to certain exceptions.

### Key Business Metrics and Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles ("GAAP") with certain business metrics and non-GAAP financial measures which we regularly review to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Accordingly, we believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for our financial information presented in accordance with GAAP and may be different from similarly titled metrics or measures presented by other companies.

### KEY BUSINESS METRICS

### Paid Members

We believe that our ability to increase the number of paid members on our platform drives our success as a business. Our customers pay for subscriptions on behalf of employees and contractors who use the platform, whom we refer to as paid members. We define paid members as the average number of users (employees, contractors, volunteers, team members, etc.) who are billed on *Collect* or *Control* plans during any particular quarter. For small and medium businesses or sole proprietors with only one employee, the business owner may also be the only paid member.

The following table sets forth the average number of paid members for each of the periods presented (in thousands):

| Three Months Ended | Paid members |
| --- | ---: |
| September 30, 2025 | 642 |
| September 30, 2024 | 684 |

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### NON-GAAP FINANCIAL MEASURES

### Limitations of Non-GAAP Financial Measures

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.

### Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net loss excluding provision for income taxes, other (income) expenses, net, depreciation and amortization and stock-based compensation expense. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue for the same period. We are focused on profitable growth and we consider adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that are not indicative of the core operating performance of our business.

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Adjusted EBITDA | $6,503 | $9,676 | $13,557 | $26,982 |
| Adjusted EBITDA margin | 19% | 27% | 13% | 26% |

### Non-GAAP Net Income and Non-GAAP Net Income Margin

We define non-GAAP net income as net loss excluding stock-based compensation expense. We define non-GAAP net income margin as non-GAAP net income divided by total revenue for the same period. We are focused on profitable growth and we consider non-GAAP net income to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of stock-based compensation expense, which is not considered indicative of the core operating performance of our business.

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Non-GAAP net income | $4,348 | $5,432 | $7,308 | $14,792 |
| Non-GAAP net income margin | 12% | 15% | 7% | 14% |

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### Free Cash Flow and Free Cash Flow Margin

We define free cash flow as net cash provided by operating activities excluding changes in settlement assets and liabilities, which represent funds held for customers and customer funds in transit, respectively, reduced by the purchases of property and equipment and software development costs. We define free cash flow margin as free cash flow divided by total revenue for the same period.

#### Free Cash Flow and Free Cash Flow Margin

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Free cash flow | $1,228 | $6,679 | $16,643 | $17,589 |
| Free cash flow margin | 4% | 19% | 16% | 17% |

### Reconciliations of Non-GAAP Financial Measures

The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.

#### Adjusted EBITDA and Adjusted EBITDA Margin

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net loss | $(2,315) | $(2,198) | $(14,272) | $(8,743) |
| Net loss margin | (7)% | (6)% | (13)% | (9)% |
| Add: |  |  |  |  |
| Provision for income taxes | 154 | 2,667 | 1,499 | 6,425 |
| Other (income) expenses, net | (96) | (181) | (1,309) | 1,033 |
| Depreciation and amortization | 2,097 | 1,758 | 6,059 | 4,732 |
| Stock-based compensation expense | 6,663 | 7,630 | 21,580 | 23,535 |
| Adjusted EBITDA | $6,503 | $9,676 | $13,557 | $26,982 |
| Adjusted EBITDA margin | 19% | 27% | 13% | 26% |

39

#### Non-GAAP Net Income and Non-GAAP Net Income Margin

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net loss | $(2,315) | $(2,198) | $(14,272) | $(8,743) |
| Net loss margin | (7)% | (6)% | (13)% | (9)% |
| Add: |  |  |  |  |
| Stock-based compensation expense | 6,663 | 7,630 | 21,580 | 23,535 |
| Non-GAAP net income | $4,348 | $5,432 | $7,308 | $14,792 |
| Non-GAAP net income margin | 12% | 15% | 7% | 14% |

#### Free Cash Flow and Free Cash Flow Margin

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by operating activities | $4,166 | $3,687 | $17,887 | $16,475 |
| Operating cash flow margin | 12% | 10% | 17% | 16% |
| (Increase) decrease in changes in assets and liabilities: |  |  |  |  |
| Settlement assets, net | (3,708) | 5,326 | 7,906 | 13,202 |
| Settlement liabilities | 1,855 | (502) | (6,393) | (5,389) |
| Less: |  |  |  |  |
| Purchases of property and equipment | — | — | (17) | — |
| Software development costs | (1,085) | (1,832) | (2,740) | (6,699) |
| Free cash flow | $1,228 | $6,679 | $16,643 | $17,589 |
| Free cash flow margin | 4% | 19% | 16% | 17% |

### Contractual Obligations and Commitments

As of September 30, 2025, there have been no material changes in our contractual obligations and commitments as disclosed in our 2024 Annual Report. As discussed elsewhere in this Quarterly Report on Form 10-Q, on July 1, 2025, we terminated our 2024 Amended Loan and Security Agreement.

### Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms whereby we agree to indemnify customers, issuing banks, card networks, vendors and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Changes in Stockholders’ Equity, or Condensed Consolidated Statements of Cash Flows.

### Off-Balance Sheet Arrangements

During the periods presented, we did not have, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

### Critical Accounting Policies and Estimates

Our condensed consolidated financial statements included elsewhere herein have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as compared to those described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report.

### Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report.

## Market risk

As filed, 195 characters.

There have been no material changes in our market risk from the disclosure included under Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2024 Annual Report.

## Controls and procedures

As filed, 1,973 characters.

### EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission ("SEC") rules and forms. Based on such evaluation, our chief executive officer and chief financial officer have concluded that as of September 30, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.

### CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### LIMITATIONS OF EFFECTIVENESS OF CONTROLS AND PROCEDURES

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

## Risk factors

As filed, 721 characters.

There have been no material changes to the risk factors set forth in Part I, Item IA. “Risk Factors” of our 2024 Annual Report, as supplemented by the risk factors set forth in Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025. You should carefully read and consider the risks and uncertainties, together with all of the other information included in the 2024 Annual Report and this Quarterly Report on Form 10-Q, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our condensed consolidated financial statements and related notes, and in the other documents that we file with the SEC.

Filed Nov 6, 2025.
Source: SEC EDGAR, the filing index for accession 0001476840-25-000137. Last ingested by Listed: Nov 5, 2026, 16:32 ET. No prices; not investment advice.