Executive Summary / Key Takeaways

• Expensify (NASDAQ:EXFY) is undergoing a significant transformation, pivoting to an AI-first, chat-centric "super app" strategy aimed at redefining financial management for businesses of all sizes.
• The company's proprietary Concierge AI and SmartScan technologies are driving substantial operational efficiencies, evidenced by an 80% reduction in human interventions for support and near-complete automation of receipt scanning, contributing to robust free cash flow generation.
• Strategic product expansions, including the Expensify Card and the rapidly growing Expensify Travel, are diversifying revenue streams and showing strong customer adoption, with travel bookings up 95% since Q1 2025.
• Despite a slight revenue decrease in Q3 2025 due to lower billable activity, increased interchange revenue from the Expensify Card and significant marketing investments in the "F1 The Movie" sponsorship are positioning the company for future growth and enhanced brand awareness.
• Expensify maintains a strong financial position, being debt-free with $61.5 million in cash and cash equivalents as of September 30, 2025, and reiterating fiscal year 2025 free cash flow guidance of $19 million to $23 million, underscoring its financial resilience amidst macroeconomic uncertainties.

The Dawn of the AI-First Super App

Expensify, Inc. (NASDAQ:EXFY), founded in 2009, has consistently aimed to simplify financial management through a cloud-based platform, initially driven by viral lead generation and a bottom-up adoption model. This foundational strategy has evolved into a bold vision: to become the "total fintech AI to primacy" by building a "payment super app" that integrates expense management, corporate cards, travel, invoicing, and potentially payroll. This ambition is underpinned by a profound commitment to artificial intelligence and a chat-centric user interface, which management believes represents the future of application design.

The company operates in a competitive landscape dominated by larger enterprise software providers like SAP (via Concur), Oracle (NetSuite), Workday (WDAY), and Intuit (INTU) (QuickBooks). While these competitors offer broad financial suites, Expensify differentiates itself with an agile, user-friendly, and mobile-first approach, particularly appealing to small and medium-sized businesses (SMBs) and individuals. Expensify's strategy emphasizes simplicity and rapid adoption, contrasting with the often more complex and resource-intensive implementations associated with its larger rivals. This focus allows Expensify to innovate quickly on consumer-facing features and target underserved market segments.

Technological Edge: The Concierge AI and New Expensify Platform

Expensify's core technological differentiator lies in its "New Expensify" platform and the deeply integrated Concierge AI. The New Expensify platform is an entirely new technology foundation built for real-time, chat-centric, and cross-platform functionality. This infrastructure is designed to power the next decade of growth, offering a seamless experience across desktop and mobile, a significant advantage in an increasingly mobile workforce.

The Concierge AI is a hybrid system, seamlessly blending cutting-edge AI with human expertise. It functions as a "single general intelligence" capable of multimodal operation, processing chat, images, email, and SMS. Unlike general AIs, Concierge is "contextual," embedded directly into the product, allowing users to interact with it naturally within the context of specific expenses or reports. This design enables sophisticated actions, such as "conversational corrections" for expense categorization and real-time fraud detection.

The tangible benefits of this AI investment are already evident. Expensify's SmartScan technology, augmented with new language models, has "almost entirely removed human review from the process" of receipt scanning, dramatically reducing costs. Similarly, the Concierge AI has achieved an "80% fewer human interventions" in support chats by replacing the initial human "first responder" tier with bespoke, AI-generated answers. Furthermore, AI is utilized in quality assurance, transcribing 100% of sales calls, reviewing them against best practices, and providing proactive coaching, which has "nearly doubled the number of perfect calls" in a single month. In engineering, Expensify's open-source codebase was even selected by OpenAI as a benchmark for training the next generation of AI engineers, highlighting its leadership in AI-driven development. These technological advancements not only create a strong competitive moat but also directly contribute to improved financial performance through significant cost savings and enhanced operational efficiency.

Strategic Expansion and Operational Momentum

Expensify's strategic initiatives extend beyond its core expense management to build out its super app vision. The Expensify Card, operating under the Updated Card Program launched in February 2024, is a key revenue driver. Interchange revenue from the card program increased to $5.4 million for the three months ended September 30, 2025, up from $3.7 million in the prior year period, and reached $15.7 million for the nine months ended September 30, 2025, compared to $4.2 million in the same period of 2024. This growth is primarily due to the successful migration of cardholder spend from the Legacy Card Program, which became immaterial in 2025. The Expensify Card is also expanding its reach, with beta access now available in the U.K. and E.U., and soon in Canada.

Expensify Travel, a newer offering, is another bright spot, demonstrating rapid adoption. Bookings grew 36% from Q2 and 95% since Q1 2025, with customers adopting travel at twice the rate they adopted the Expensify Card. The platform now includes central billing, event management, and enhanced employee itineraries, simplifying corporate travel planning. The company's partnership with the Brooklyn Nets, who adopted Expensify Travel, further validates the platform's capabilities.

A critical operational focus is the migration of existing "Classic" Expensify customers to the "New Expensify" platform. The company aims for 90% feature parity by the end of 2025, has migrated data for nearly all customers, and now onboards all new customers directly to New Expensify. This migration is crucial for leveraging the full potential of AI and the super app vision, promising reduced support burden and increased monetization. Additionally, Expensify simplified its "Collect" plan pricing in Q1 2025 to a flat $5 per member per month, billed per account, to better serve its self-service customer base.

Financial Performance and Robust Liquidity

Expensify's financial performance in the nine months ended September 30, 2025, reflects a period of strategic investment and operational efficiency gains. Revenue for the three months ended September 30, 2025, was $35.06 million, a slight decrease of 1% year-over-year, primarily due to lower billable activity and increased cashback payments, partially offset by strong interchange revenue. For the nine months ended September 30, 2025, revenue increased by 5% to $106.90 million, driven by the growth in interchange.

Gross margin for the three months ended September 30, 2025, was 50%, down from 52% in the prior year, and 51% for the nine months ended September 30, 2025, compared to 55% in the same period of 2024. This reflects shifts in revenue mix and increased payment processing fees, though partially offset by AI-driven SmartScan cost reductions. Operating expenses saw significant shifts: Research and development decreased by 13% and 14% for the three and nine months, respectively, as resources were reallocated to sales and marketing. Sales and marketing expenses, conversely, surged by 51% and 135% for the three and nine months, largely due to the "F1 The Movie" sponsorship.

Despite a net loss of $2.31 million for the quarter and $14.27 million for the nine months ended September 30, 2025, Expensify demonstrated strong cash flow generation. Net cash provided by operating activities was $17.90 million for the nine months ended September 30, 2025, up from $16.50 million in the prior year, driven by increased interchange revenue and lower SmartScan costs.

The company's liquidity is robust, with $61.50 million in cash and cash equivalents as of September 30, 2025.

Notably, Expensify is now debt-free, having fully repaid its amortizing term mortgage in August 2024 and terminated its revolving credit facility in July 2025.

A new share repurchase program, authorizing up to $50 million, had $44 million remaining as of September 30, 2025, underscoring management's commitment to returning capital to shareholders after strategic investments.

Competitive Dynamics and Future Outlook

Expensify's competitive positioning is defined by its unique AI-first, chat-centric approach, which stands in contrast to the more siloed product offerings and traditional sales models of its larger competitors. While rivals like SAP (SAP) and Oracle (ORCL) excel in broad enterprise integrations and scale, Expensify's agility and focus on user experience, particularly for SMBs, allow it to capture market segments that prioritize ease of use and rapid implementation. The company's deep integration of AI throughout its platform, rather than as an add-on, provides a distinct advantage, as it can leverage its vast proprietary data on company payments, employee usage, and organizational structure to offer highly contextual and proactive financial insights. This "super intelligent concierge AI" is difficult for competitors with legacy architectures to replicate.

The company's outlook is anchored by its fiscal year 2025 free cash flow guidance, reiterated at $19 million to $23 million. This guidance incorporates a conservative view of the macroeconomic environment, including potential impacts from elevated inflation and tariffs. Management anticipates that the significant marketing investment in "F1 The Movie," which generated an estimated 1.3 billion minutes of logo visibility and over $100 million in external marketing, will drive substantial brand awareness and accelerate bottom-up adoption, with the bulk of the benefit expected in Q3 2025 and beyond.

Future AI functionality, such as "virtual CFO" capabilities, aims to provide real-time fraud protection, continuous flux analysis, and proactive cash forecasting, further enhancing the platform's value proposition. Expensify's long-term strategy includes expanding its super app to encompass invoicing, bill pay, and potentially payroll, all offered at a highly competitive price point. The company's lean organizational structure, with a team focused on innovation, automation, and outsourcing, is a key enabler of its ability to execute this ambitious technological roadmap efficiently.

Conclusion

Expensify is in the midst of a transformative journey, leveraging its AI-first, chat-centric "New Expensify" platform to redefine financial management. The company's strategic investments in Concierge AI and SmartScan are yielding tangible operational efficiencies and cost savings, while product expansions like the Expensify Card and Expensify Travel are diversifying revenue and demonstrating strong adoption. Despite a challenging macroeconomic backdrop, Expensify's robust liquidity, debt-free status, and commitment to shareholder returns through buybacks underscore its financial strength. The successful migration of customers to New Expensify and the continued realization of benefits from its F1 movie sponsorship are critical catalysts for future growth. Expensify's unique technological approach and agile execution position it as a compelling player in the fintech landscape, with the potential to capture significant market share by offering a highly integrated, intelligent, and user-friendly financial super app.