Slide 1: Q3 2023 Earnings
Q3 2023 Earnings November 7th, 2023
Slide 2: Disclaimer
Disclaimer All information included in this presentation is unaudited. FORWARD-LOOKING STATEMENTS Forward-looking statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statemen
Slide 3: Growth Strategy
Growth Strategy Continuing our organic international expansion Adding new viral loops as platform capabilities expand Increasing Expensify Card adoption for new and current customers Expanding the number of seats for current Expensify customers Acquiring new Expensify customers
Slide 4: Three key strategies for Expensify's long-term success
Three key strategies for Expensify’s long-term success 1 Enormous untapped market opportunity 2 Unique bottom-up acquisition model 3 Subscription based core business model
Slide 5: The VSB/SMB market is huge
The VSB/SMB market is huge Source: https://www.census.gov/data/tables/2022/econ/abs/2022-abs-company-summary.html. Census data collected in 2021.
Slide 6: But you cannot underwrite the smallest firms for a corporate card
But you cannot underwrite the smallest firms for a corporate card % of Total Annual Revenue Underwriting Employees* per Firm Efficiency Single employee firms 2% $200k LOW Firms with 2-10 employees 26% $450k LOW Firms with 11-50 employees 40% $2.5M MEDIUM Firms with 51-100 employees 15% $10M HIGH Firm
Slide 7: We already have inbound momentum
We already have inbound momentum Source: Weekly sign up data broken down by public domain emails, private emails that Clearbit can provide company enrichment data for, and private emails that Clearbit cannot provide company enrichment data for.
Slide 8: Strengthen engagement for the massive freemium lead pipeline
To capitalize on the momentum, we need to strengthen the engagement for the massive freemium lead pipeline Discover Start Activate Convert Scale
Slide 9: New Expensify Q3 Product Update
Q3 Product Update New Expensify
Slide 10: Expensify
Expensify
Slide 11: End-user request money flow
Expensify Chats (sw) Dy Exponsity Now chat New group Send money Request money Split bill Now Workspace GGetthe Expensity Ca and more! New chat x bob@constrscionpalecom bob@eonstructionpals.com bobconstrctionpals com GHeRRHOHE8 HeRReRURE GaxevaNw os Cm = & ® < () bob@construction.. = Say hello! ‘This
Slide 12: Manager receives an email
Expensify = M Gmai Compose Inbox Starred Snoozed Sent Drafts More Manager receives an email Q_ Search mail <€ aoos ° Alice is requesting $20 Alice <replies+12345678@expensity.com> tome + $20.00 Driving to the Jefferson's build site To respond, head over to new.expensify.com or reply directly to this
Slide 13: Manager pays using a Business account
Manager pays using a Business account
Slide 14: We create a workspace in the background
We create a workspace in the background
Slide 15: Q3 Business Update
Expensify Q3 Business Update
Slide 16: Our focus remains on general awareness
Our focus remains on general awareness ● SEO & paid digital advertising ○ Investments in SEO, SEM, and content marketing continued in Q3; seeing promising results within the channel. ● Conferences/Events ○ Attended Xero and Oracle NetSuite’s global conferences as top sponsors. SaaStr Global conferen
Slide 17: Recent platform updates
Recent platform updates ● The Expensify Card ○ Accounting Partners who onboard clients to the Expensify Card receive 50 basis points in revenue share for their clients, further strengthening the company’s presence in the accounting channel. ○ Net interchange derived from the Expensify Card increased
Slide 18: Q3 Financials
Expensify Q3 Financials
Slide 19: Q3 2023 Revenue, Average Paid Members, Net Interchange
Q3 2023 Revenue Average Paid Members Net Interchange $36.5MM 719,000 $3.1MM
Slide 20: Q3 2023 Cash Flow, Net Loss and Adj. EBITDA
Q3 2023 Operating Cash Flow Free Cash Flow1 (Includes timing of customer funds) (Excludes timing of customer funds) $(5.1MM) $(7.1MM) Net Loss Non-GAAP Net Loss2 Adj. EBITDA3 $(17.0MM) $(6.7MM) $(3.5MM) 1 We define Free cash flow as net cash (used in) provided by operating activities excluding chang
Slide 21: Interchange Treatment Update
Interchange Treatment Update
Slide 22: Expensify Card Interchange Update
Expensify Card Interchange Update ● Expect to start issuing new Expensify Cards with new revenue treatment before end of year. ● Expensify is stepping in as the program manager of these new cards ○ Benefits include: ■ ~20% more interchange ■ Different accounting treatment: Interchange is revenue, ra
Slide 23: Expense Reductions
Expensify Expense Reductions
Slide 24: Internal expense reduction is an area of focus
Internal expense reduction is an area of focus ● Adapting to current economic conditions ○ The percentage of customers citing business closing / downsizing as reason for reducing subscriptions has jumped nearly 50% from Q1 2023. ● Controlling internal costs We are adjusting internal expenses in resp
Slide 25: Q4 2023 October Paid Members
Q4 2023 Monthly Paid Members October Paid Members 730,000 Denotes October 2023 activity Note: There can be no assurances that the trends of previous fourth quarters are representative of future trends.
Slide 26: Q3 2023 Summary
Q3 2023 Summary ● Net interchange increased 16% quarter over quarter and 65% year over year; the Expensify Card continues to grow. ● Remain in a rebuilding phase as we continue the transition to our new platform in Q4. ● Early reception to the new platform continues to be positive; continue to push
Slide 27: Q&A
Q&A
Slide 28: Expensify
Expensify
Slide 29: Appendix
Appendix
Slide 30: GAAP to Non-GAAP Reconciliation: Non-GAAP Net Loss
GAAP to Non-GAAP Reconciliation: Non-GAAP Net Loss Three months ended September 30, 2023 (unaudited, in thousands) Net loss $ (17,003) Add: Stock-based compensation 10,267 Non-GAAP Net loss1 $ (6,736) 1 We define Non-GAAP Net loss as net income (loss) excluding stock-based compensation.
Slide 31: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation: Adjusted EBITDA Three months ended September 30, 2023 (unaudited, in thousands) Net loss $ (17,003) Provision for income taxes (270) Interest and other expenses, net 2,375 Depreciation and amortization 1,082 Stock-based compensation 10,267 Adjusted EBITDA $ (3,549) N
Slide 32: GAAP to Non-GAAP Reconciliation: Free Cash Flow
GAAP to Non-GAAP Reconciliation: Free Cash Flow Three months ended September 30, 2023 (unaudited, in thousands) Net cash used in operating activities $ (5,106) (Increase) decrease in changes in customer assets and liabilities Settlement assets (4,137) Settlement liabilities 3,833 Adjusted operating
Slide 33: Estimated Stock-Based Compensation - Next 4 Quarters
Estimated Stock-Based Compensation (Millions) - Next 4 Quarters Q4 2023 Q1 2024 Q2 2024 Q3 2024 Low High Low High Low High Low High Cost of revenue, net $ 3.0 $ 3.6 $ 2.8 $ 3.4 $ 2.7 $ 3.3 $ 2.7 $ 3.2 Research and development 3.3 4.0 3.1 3.8 3.0 3.7 3.0 3.7 General and administrative 2.1 2.5 2.0 2.4
Slide 34: Expensify
Expensify