Slide 1: Q3 2022 Earnings
Q3 2022 Earnings November 10th, 2022
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: Long term strategy
Long term strategy Every month is (usually) our best month.
Slide 4: Three secrets to Expensify's long-term success
Three secrets to Expensify’s long-term success 1 Enormous untapped market opportunity 2 Unique bottom-up acquisition model 3 Billion-user platform ambition
Slide 5: Full court press on whole market, not just enterprise
Full court press on whole market, not just enterprise $7.1B Enterprise US TAM 1000+ EEs UK: $2.3B $1.5B Mid-Market US TAM 500-1000 EEs AU: $1.6B CA: $1.7B $12.0B SMB US TAM 10-499 EEs $2.4B VSB US TAM 1-9 EEs US: $16.0B Note: EEs = Employees. VSB = Very Small Businesses. Figures represent our estima
Slide 6: Freemium leads + efficient sales = Profitable growth
Freemium leads + efficient sales = Profitable growth g sin rti 's ve M /A Ad l e s Sa Subscriptions Pa rtn er s Fre e Pla n
Slide 7: Bottom-up sales reaches the rest of the market
Bottom-up sales reaches the rest of the market Top Down Bottom Up
Slide 8: Only Expensify can reach the full market
Only Expensify can reach the full market A B C D Expensify Enterprise scale ✓ ✓ Consumer grade ✓ ✓ ✓ Global reach ✓ ✓ Native card+travel ✓ Free ✓ ✓ ✓
Slide 9: Complete chat-first pre-accounting solution for $9/seat
Complete chat-first pre-accounting solution for $9/seat
Slide 10: Steady at the wheel
Steady at the wheel When others hunker down, we brave the storm.
Slide 11: Despite the macroeconomic climate, we remain steadfast
Despite the macroeconomic climate, we remain steadfast ● The Market ○ "Stripe lays off 14% of workers" ○ "Brex lays off 11% of staff" ○ "Pleo lets go 15% of staff" ○ "Twilio announces 11% of employees will lose jobs" ○ "Meta reduces workforce by 13%" ● Expensify ○ We're hiring. ○ We’re generating ca
Slide 12: Steady growth of inside sales to increase organic conversion
Steady growth of inside sales to increase organic conversion ● 70+ sales contractors onboarding and selling to customers ○ Most customers still prefer self service versus human sales ○ Still getting sizable organic lead channel to fully engage ● Next up: Dial up Sales Development Reps as we exhaust
Slide 13: Steady rollout of AM's to stabilize and accelerate expansion
Steady rollout of AM's to stabilize and accelerate expansion ● 41% of revenue is now overseen by an Account Manager… ○ … with the remainder under consideration for AM expansion ● Tasked with converting pay-per-use to annual subscriptions… ○ … which increases revenue and reduces overage volatility ●
Slide 14: Steady increase in engaged accounting partners
Steady increase in engaged accounting partners ● ~50% of partner revenue is now overseen by an Partner Manager… ○ … with the remainder under consideration for PM expansion ● Methodically onboarding new accountants top-down and bottom-up ○ eg: PMs engage firms to get all accountants trained ● Next up
Slide 15: Steady progress on next-gen platform
Steady progress on next-gen platform ● Chat platform mature and used in every sales/support context: ○ SDRs chat with every new prospect ○ Sales chat with every new lead ○ AMs chat with finance teams ○ PMs chat with firm accountants ● Next up: Optimizing for mobile in preparation for customer employ
Slide 16: Steady progress on chat-centric payroll solution
Steady progress on chat-centric payroll solution ● Proven in live operation internally since Jan'21… ○ … and first customers have been onboarding ● Obtained 47 of 51 Money Transmitter Licenses ○ … still working on NY, TX, HI, and MA ● Supports sophisticated public company requirements ○ eg: multi-en
Slide 17: Steady use of opportunistic buybacks
Steady use of opportunistic buybacks ● We believe our shares to be significantly undervalued: ○ May'22: Authorized $50MM share repurchase ○ Sep'22: Repurchased $4MM1 ○ Sep'22: $106MM cash on hand ● Next up: Repurchase $6MM, starting tomorrow morning ○ … with $40MM to be used opportunistically 1 $4.2
Slide 18: Q3 Performance
Q3 Performance
Slide 19: Q3 2022 continues to show strong long term growth
Q3 2022 continues to show strong long term growth Paid Members Revenue 761K $42.5MM Free Plan Customers Annualized Revenue1 15K $170MM Unless otherwise denoted, figures are actuals for the three months ended September 30th, 2022. 1 Calculated as three months ended September 30th, 2022 revenue multip
Slide 20: Downward pressure on ARPU is expected and temporary
Downward pressure on ARPU is expected and temporary ● Partner Managers onboarding more accountants into the Expensify Approved! Accountants program ● Currency headwinds due to strength of USD. ● Expensify Card ○ Card volume is growing and cash back is contra-revenue ○ Card holders get a discount on
Slide 21: Expensify Card continues to grow at rapid rate
Expensify Card continues to grow at rapid rate Y/Y interchange growth Q3 Gross Interchange 115% $1.9MM All metrics are actuals for the three months ended September 30th, 2022.
Slide 22: Expensify continues to add money in the bank every quarter
Expensify continues to add money in the bank every quarter Operating Cash Flow Free Cash Flow1 (Includes timing of customer funds) (Excludes timing of customer funds) $(0.9MM) $4.7MM Net Loss Non-GAAP Net Income2 Adj. EBITDA3 Adj. EBITDA Margin4 $(8.2MM) $5.1MM $9.0MM 21% All metrics, unless noted o
Slide 23: Continue to maintain strong long-term guidance
Continue to maintain strong long-term guidance ● We reaffirm our long term guidance provided in connection with our fourth quarter 2021 results of 25-35% revenue growth over a multi-year period. Long Term Growth Guidance 25-35% Note: The Company's guidance is based on a number of estimates, expectat
Slide 24: Q3 summary: The business is extremely healthy.
Q3 summary: The business is extremely healthy. ● Strong free cash flow and profitable (adj EBITDA) ● Paid members continue to grow ● Expensify Card up 115% from last year ● Strong enthusiasm for product road map from customers
Slide 25: October was our best month ever (again)
October was our best month ever (again) Monthly Paid Members Oct. 22 Paid Members Omicron 783K October 2022 Revenue $14.3-14.7MM Note: There can be no assurances that October trends will continue through Q4 '22.
Slide 26: Q&A
Q&A
Slide 27: Slide 27
Slide 28: Appendix
Appendix
Slide 29: GAAP to Non-GAAP Reconciliation: Non-GAAP Net Income
GAAP to Non-GAAP Reconciliation: Non-GAAP Net Income Three months ended September 30, 2022 (unaudited, in thousands) Net (loss) income $ (8,242) Add: Stock based compensation 13,364 IPO related bonus1 – Non-GAAP Net income2 $ 5,122 1 Reflects amounts paid in Q3 related to a one-time special bonus pa
Slide 30: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation: Adjusted EBITDA Three months ended September 30, 2022 (unaudited, in thousands) Net (loss) income $ (8,242) Net (loss) income margin (19)% (Benefit) provision for income taxes 156 Interest and other expenses, net 2,369 Depreciation and amortization 1,323 Stock-based
Slide 31: GAAP to Non-GAAP Reconciliation: Free Cash Flow
GAAP to Non-GAAP Reconciliation: Free Cash Flow Three months ended September 30, 2022 (unaudited, in thousands) Net cash used in operating activities $ (929) (Increase) decrease in changes in customer assets and liabilities Settlement assets (1,097) Settlement liabilities (5,207) Adjusted operating
Slide 32: Estimated Stock-Based Compensation - Next 4 Quarters
Estimated Stock-Based Compensation (Millions) - Next 4 Quarters Q4 2022 Q1 2023 Q2 2023 Q3 2023 Low High Low High Low High Low High Cost of revenue, net $ 3.6 $ 4.3 $ 3.4 $ 4.1 $ 3.3 $ 4.0 $ 3.3 $ 3.9 Research and development 1.5 1.8 1.4 1.7 1.4 1.7 1.3 1.6 General and administrative 3.6 4.3 3.4 4.1
Slide 33: Slide 33