Expensify NASDAQ: EXFY reported first-quarter 2026 results showing continued top-line pressure alongside positive cash generation and profitability on a non-GAAP basis, as management emphasized ongoing customer migration to “New Expensify” and efforts to position the business for a future return to growth.
Q1 financial results: revenue down, interchange up
Chief Financial Officer Ryan Schaffer said Q1 revenue totaled $34 million, down 6% year-over-year. Average paid members were 632,000, down 4% year-over-year. Schaffer highlighted strength in card-related monetization, with total interchange revenue of $5.5 million, up 10% year-over-year.
Schaffer also detailed cash flow and profitability metrics for the quarter. Operating cash flow was $0.1 million and free cash flow was $2.5 million, which he said largely reflected “the timing of customer payments.” On the income statement, Expensify posted a GAAP net loss of $2.3 million, while non-GAAP net income was $3.6 million and adjusted EBITDA was $6.2 million.
“While revenue has declined, profitability is still strong, and that's a key theme for the business right now,” Schaffer said.
Free cash flow impacted by one-time legal payment; guidance reiterated
Schaffer noted the company made a one-time legal payment of $2.6 million related to a class action lawsuit the company has since settled. Excluding that payment, he said free cash flow would have been “roughly $5 million” for the quarter.
Despite that dynamic, Schaffer said the company is reiterating its full-year 2026 free cash flow guidance of $6 million to $9 million, adding that management remains “conservative” in its outlook.
Early Q2 paid member trend and focus areas
As a forward-looking indicator, Schaffer shared April 2026 paid active member data. For the month, Expensify had 641,000 paid active members, up from the Q1 average of 632,000. He called the improvement “an encouraging sign for the quarter.”
Schaffer said the company is focused on “maintaining strong fundamentals,” investing in long-term growth opportunities, continuing to migrate customers to New Expensify, and iterating quickly based on user feedback.
Product and distribution updates: BYOC strategy, partnerships, and app improvements
Founder and CEO David Barrett framed the quarter as building “a more durable, more profitable business today” while preparing for “a much stronger growth story tomorrow.” He pointed to progress in both distribution and product adoption, including a push to expand the company’s “bring your own card” (BYOC) strategy.
Barrett said BYOC is designed to reduce adoption friction by allowing customers to connect existing corporate cards to Expensify to automatically import transactions as expenses. “That removes a major adoption barrier and lets us meet customers where they already are,” he said.
Barrett also highlighted expanded partnerships and integrations, including:
- A renewed referral program with ANZ, the addition of Kiwibank, and a partnership with the Institute of Commercial Payments.
- New ERP relationships with Campfire and Rillet.
- A travel integration with American Airlines.
On product development, Barrett said Q1 included “more than 30 improvements across the app,” with monthly releases focused on finance workflows, spend visibility, approvals, insights, and a range of usability enhancements. He described February’s updates as helping the product move beyond expense capture toward spend management and automation, including “merchant and itemized receipt rules.” In March, he pointed to additions such as GPS miles tracking, expanded insights charts, virtual card controls, faster report creation, bulk expense selection, inline editing, and CSV member imports.
“Taken together, these updates make New Expensify faster, more automated, and more useful for both individual employees and finance teams,” Barrett said.
Migration to New Expensify and performance focus
During the Q&A, an analyst asked Barrett to elaborate on his comment that the business may be “poised for an inflection point.” Barrett said the company’s strategy has long been to shift from traditional expense management toward “a more modern, collaborative, AI-focused solution,” and that the company is nearing the end of a long investment cycle tied to that transition.
Barrett said the company has been migrating users to New Expensify and is seeing positive customer reaction, including among former Expensify Classic users. He also described interest from “new native customers” who have not used Classic. He cited April’s paid member improvement as one of the “green shoot indicators” supporting management’s confidence, while emphasizing the strategy is long-term and “not going to happen overnight.”
When asked about the share of Classic customers migrated to New Expensify, Barrett said it is “about 60%.” He added that migration is proceeding in a controlled way, with the company closely monitoring feedback. Barrett said the most important feedback has been related to performance—while the functionality is “great” and “reliable,” he said it is “just not fast enough for the larger customers.”
Barrett said engineering efforts have shifted toward responding to customer requests and “hardening and improving the performance” of existing New Expensify functionality. On whether the company would shift from “carrots” to “sticks” to accelerate migration, Barrett said he did not expect that change, arguing that the incentive-based approach has been working and that the company can maintain Classic without forcing customers to move. He also suggested some larger customers are eager to migrate, but the company is holding back until performance is ready.
The call ended after management noted some analysts were double-booked and would be addressed offline. Barrett closed by calling it “an exciting time” for the company.
About Expensify NASDAQ: EXFY
Expensify, traded on NASDAQ under the ticker EXFY, is a software-as-a-service (SaaS) company specializing in automated expense management and reporting. Its flagship platform enables employees to capture receipts via mobile app or email, automatically extract expense details through optical character recognition (OCR) and artificial intelligence, and submit streamlined expense reports. The solution is designed to eliminate manual data entry and reduce approval cycle times, serving a broad range of industries from small businesses to large enterprises.
Founded in 2008 by entrepreneur David Barrett, Expensify has grown from a simple receipt-scanning app into a comprehensive spend management suite.
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