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Expensify, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 6 August 2026: press release. Guidance figures: 4 raised, 1 new. The quarter’s numbers.

Key takeaways

  • Revenue fell 5% year over year: Net revenue was $33.9 million against $35.8 million a year earlier. Six-month revenue was $67.8 million against $71.8 million. Source
  • Classic is a fixed, draining pool: Management describes Expensify Classic as a stable base that needs minimal investment and generates steady cash, with no new Classic sign-ups. Source
  • Net new customer revenue up over 250%: Revenue from customers who signed up on New Expensify and never used Classic grew more than 250% year over year. Source
  • Adjusted EBITDA margin was 19%: Adjusted EBITDA margin was 19% for the quarter, against negative 4% a year earlier. The six-month margin was 19%, against 10%. Source
  • Free cash flow was $6.4 million: Operating cash flow was $8.4 million. Free cash flow was $6.4 million, or 19% of revenue, against $6.3 million a year earlier. Source
  • Shares outstanding fell about 7%: Q2 repurchases total about 6.8 million shares, including about 0.7 million bought at an average $1.63. Management describes this as about a 7% reduction in shares outstanding. Source

“This is the most exciting quarter in years, as we are finally able to pull back the curtain on New Expensify's growth.”

David Barrett, Founder and CEO

Guidance

AreaPeriodFigureAgainst last quarter
Free cash flow SourceFiscal year ending December 31, 2026$12.0 million - $14.0 millionRaised from $6.0 million - $9.0 million
Stock-based compensation SourceQ3 2026$5.4 million - $7.4 millionRaised from $4.5 million - $6.5 million
Stock-based compensation SourceQ4 2026$5.2 million - $7.2 millionRaised from $4.5 million - $6.5 million
Stock-based compensation SourceQ1 2027$5.0 million - $7.0 millionRaised from $4.3 million - $6.3 million
Stock-based compensation SourceQ2 2027$4.9 million - $6.9 millionNew

What changed from last quarter

  • Guidance raised: Full-year 2026 free cash flow estimate raised to $12.0 million to $14.0 million from $6.0 million to $9.0 million. Source
  • Guidance raised: Stock-based compensation estimates for Q3 2026, Q4 2026 and Q1 2027 were raised, and a Q2 2027 estimate was added. Source
  • New: The company repurchased shares through a modified Dutch auction tender offer, a capital return action not in the Q1 release. Source
  • New: Expensify launched an MCP connection to AI assistants for natural-language access to expense data. Source
  • New: Natural-language setup and spend analysis were added, and AI-powered workflow agents entered beta. Source

Results and growth drivers

  • Revenue fell 5% year over year: Net revenue was $33.9 million against $35.8 million a year earlier. Six-month revenue was $67.8 million against $71.8 million. Source
  • Net loss was $3.9 million: Net loss was $3.9 million against $8.8 million a year earlier. Diluted loss per share was $0.04, against $0.10 in the prior-year quarter. Source
  • Non-GAAP net income was $3.4 million: Non-GAAP net income was $3.4 million, against a $1.9 million loss a year earlier. Non-GAAP net income excludes stock-based compensation expense. Source

Classic and New Expensify

  • Classic is a fixed, draining pool: Management describes Expensify Classic as a stable base that needs minimal investment and generates steady cash, with no new Classic sign-ups. Source
  • Net new customer revenue up over 250%: Revenue from customers who signed up on New Expensify and never used Classic grew more than 250% year over year. Source
  • Most Classic customers have switched: The net new customer growth figure excludes Classic customers who moved to New Expensify, which management says is most of them. Source
  • Classic churn reduces the base: Management says ongoing churn will gradually reduce the Classic customer base over time. Source

“Based on that conviction, we attempted to repurchase $25 million of Class A common stock using a modified Dutch auction tender offer”

David Barrett, Founder and CEO

Products and customers

  • Expensify Card interchange up 12%: Interchange revenue from the Expensify Card reached $5.9 million, up 12%. The Q1 release reported $5.5 million, up 10%. Source
  • AI setup and automation in beta: Customers can set up Expensify, automate expenses and analyze spend in natural language by email, text or in-app. AI workflow agents entered beta. Source
  • MCP links Expensify to AI assistants: The Expensify MCP connects Expensify to assistants such as ChatGPT, Claude and Cursor for natural-language access to expense data. Source
  • Over 30 product improvements shipped: More than 30 improvements shipped in the quarter across cards, mileage tracking, policy controls, bulk editing and AI-powered spend controls. The company was named Expense Management Platform of the Year by TravelTech Breakthrough Awards. Source

Costs and margins

  • Gross margin dollars were lower: Gross margin was $16.3 million against $18.6 million. Cost of revenue, net was $17.5 million against $17.2 million. Source
  • Sales and marketing expense was lower: Sales and marketing expense was $4.7 million against $14.3 million. Total operating expenses were $19.3 million against $28.9 million. Source
  • Stock-based compensation rose slightly: Stock-based compensation expense was $7.2 million against $6.9 million. Six-month expense was $13.2 million against $14.9 million. Source
  • Adjusted EBITDA margin was 19%: Adjusted EBITDA margin was 19% for the quarter, against negative 4% a year earlier. The six-month margin was 19%, against 10%. Source

“All that's new is (I feel) we have increasingly solid evidence the plan is going to work”

David Barrett, Founder and CEO

Cash flow and balance sheet

  • Free cash flow was $6.4 million: Operating cash flow was $8.4 million. Free cash flow was $6.4 million, or 19% of revenue, against $6.3 million a year earlier. Source
  • Six-month operating cash flow lower: Six-month operating cash flow was $8.6 million against $16.0 million. Six-month free cash flow was $8.9 million against $15.4 million. Source
  • Q1 free cash flow included lawsuit payment: Free cash flow of $2.5 million in the first quarter included a $2.6 million one-time payment to settle the shareholder class action lawsuit.
  • Cash and equivalents were $65.8 million: Cash and cash equivalents were $65.8 million at June 30, 2026, against $63.1 million at December 31, 2025. Total stockholders' equity was $134.6 million. Source

Share repurchases and shareholder returns

  • Tender offer repurchased 6.1 million shares: The company attempted to repurchase $25 million of Class A stock through a modified Dutch auction tender offer, buying 6.1 million shares at $1.20. Source
  • Tender was substantially undersubscribed: Management says the tender was substantially undersubscribed even though the offer carried a premium to the share price. Source
  • Shares outstanding fell about 7%: Q2 repurchases total about 6.8 million shares, including about 0.7 million bought at an average $1.63. Management describes this as about a 7% reduction in shares outstanding. Source

Strategy and market

  • Two levers set the path: Management ties the path back to sustained growth to how effectively it executes on Classic migration and new customer acquisition. Source
  • Less than 1% of businesses paid: Management says less than 1% of 300 million businesses have ever paid Expensify or competitors, and New Expensify aims at a market 10-100x larger than Classic. Source
  • Same market, unchanged plan: Management says the market is the same one that has been there all along, and the plan has not changed. Source

Coming up, as management said on 6 August 2026

  • Scale acquisition through sales: Management plans to accelerate new customer acquisition by scaling lead generation and high-velocity self-service sales. Source

Figures management reported

FigureReported
Annual recurring revenue from net new customers Sourceover $10 million
Net new customers Sourceover 10,000
Paid members Source640,000
Members worldwide Source15 million

Risks management discussed

  • Demand: Management says churn in the fixed Classic customer pool is an ongoing reduction to the base. Source

Earlier plans management reported on

  • Not stated: Management says the current plan is the same story it told at IPO and on every earnings call since. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.