Slide 1: Q1 2023 Earnings
Q1 2023 Earnings May 9th, 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: Long term strategy
Long term strategy
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: Bottom-up sales reaches the rest of the market
Bottom-up sales reaches the rest of the market Company 1 Company 2 Company 3 CFO CFO CFO Organic Growth of Expensify Starts Here Company Organic Growth of Organic Growth of Company Company Patient Zero (initial contact point) Employees Referred through Patient Zero Employees Adopted after CFO Implem
Slide 7: 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 8: Consolidating payment opportunities
Consolidating payment opportunities
Slide 9: Q1 Updates
Q1 Updates The ship continues to sail through tough headwinds
Slide 10: Supercharging the accounting channel
Supercharging the accounting channel ● Even a small firm is an enterprise-sized opportunity: ○ Each firm has dozens of accountants ○ Each accountant has dozens of SMB clients ● Assigned Partner Managers to the 500+ largest partner firms, over half of partner revenue is now overseen by a Partner Mana
Slide 11: Supercharging our sales efforts
Supercharging our sales efforts ● Created an outbound SDR program, using multiple vendors, built to scale efficiently. Lead Pipeline ● Continued optimizing the sales program for ROI, on average, doubling the number of annual seats closed by the sales team each month compared to the previous month in
Slide 12: Supercharging our contributor community
Supercharging our contributor community ● Hosted ExpensiConX with Jobs Completed by Contributors leading React Native engineers to accelerate partnership and the roadmap. ● Contributors have increased the amount of jobs completed in April 2023 by 322% compared to April 2022.
Slide 13: Q1 Financials
Q1 Financials
Slide 14: Q1 2023 Revenue, Average Paid Members, Gross Interchange
Q1 2023 Revenue Average Paid Members Gross Interchange $40.1MM 747,000 $2.3MM
Slide 15: Q1 2023 Cash Flow and Earnings
Q1 2023 Operating Cash Flow Free Cash Flow1 (Includes timing of customer funds) (Excludes timing of customer funds) $7.6MM $10.2MM Net Loss Non-GAAP Net Income2 Adj. EBITDA3 $(5.9MM) $4.1MM $8.7MM 1 We define Free cash flow as net cash (used in) provided by operating activities excluding changes in
Slide 16: Q1 2023: Customers up, activity down
Q1 2023: Customers up, activity down ● Customer count is up in Q1, however, activity across all customers is down resulting in a net decrease in paid members. ● Subscription members increased in Q1, but Pay Per Use (PPU) member decrease outstripped growth in subscriptions. ● We believe decrease in a
Slide 17: April paid members growth continues to be volatile
April paid members growth continues to be volatile Monthly Paid Members April Paid Members 733,000 Denotes previous April activity Note: There can be no assurances that the trends of previous second quarters are representative of future trends.
Slide 18: 2023 free cash flow
2023 free cash flow ● Free cash flow remains strong despite decreased paid member activity - $10.2M in Q1. ● In Q2 (starting May 10th) we plan to deploy Q1’s Free Cash Flow to: ○ Buyback $3MM in shares in the open market ○ Reduce debt by $8MM
Slide 19: Positioning ourselves for success in the future
Positioning ourselves for success in the future ● Sales efforts are starting to show real results + free trials have seen a huge jump, so we are optimistic for the future ● We are well capitalized and free cash flow is strong. We are using our positive cash flow to reduce debt and return value to sh
Slide 20: Positioning ourselves for success in the future
Positioning ourselves for success in the future ● As a reminder, the future of the Expensify superapp is: ○ Expense management ○ Corporate card with cashback ○ Invoicing ○ Billing ○ Chat ○ Corporate travel management ○ Personal travel management ○ P2P money transfer ○ Bill splitting ○ Personal Walle
Slide 21: Q&A
Q&A We are now hosting an FAQ on our Investors Relations page. Go to investors.expensify.com for more Q&A.
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Slide 23: Appendix
Appendix
Slide 24: GAAP to Non-GAAP Reconciliation: Non-GAAP Net Income
GAAP to Non-GAAP Reconciliation: Non-GAAP Net Income Three months ended March 31, 2023 (unaudited, in thousands) Net (loss) income $ (5,945) Add: Stock-based compensation 10,004 Non-GAAP Net income1 $ 4,059 1 We define Non-GAAP Net Income as net income (loss) excluding stock-based compensation. Thro
Slide 25: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation: Adjusted EBITDA Three months ended March 31, 2023 (unaudited, in thousands) Net (loss) income $ (5,945) Provision for income taxes 1,825 Interest and other expenses, net 1,416 Depreciation and amortization 1,413 Stock-based compensation 10,004 Adjusted EBITDA $ 8,713
Slide 26: GAAP to Non-GAAP Reconciliation: Free Cash Flow
GAAP to Non-GAAP Reconciliation: Free Cash Flow Three months ended March 31, 2023 (unaudited, in thousands) Net cash provided by operating activities $ 7,642 (Increase) decrease in changes in customer assets and liabilities Settlement assets (2,683) Settlement liabilities (738) Adjusted operating ca
Slide 27: Estimated Stock-Based Compensation - Next 4 Quarters
Estimated Stock-Based Compensation (Millions) - Next 4 Quarters Q2 2023 Q3 2023 Q4 2023 Q1 2024 Low High Low High Low High Low High Cost of revenue, net $ 2.9 $ 3.6 $ 2.9 $ 3.5 $ 2.8 $ 3.4 $ 2.7 $ 3.3 Research and development 2.5 3.1 2.5 3.0 2.4 3.0 2.3 2.9 General and administrative 2.2 2.6 2.1 2.6
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