Expensify, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This summary covers the quarterly period ended March 31, 2026. Expensify, Inc. operates a cloud-based expense management platform serving over 15 million members globally. The company generates revenue primarily through subscription fees and interchange fees from its Expensify Card program. As of the reporting date, the company is classified as an accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue, Net | $33.97 million | $36.07 million |
| Gross Margin | $16.17 million (48%) | $18.24 million (51%) |
| Net Loss | $(2.34) million | $(3.17) million |
| Net Loss Per Share (Basic/Diluted) | $(0.02) | $(0.03) |
| Operating Cash Flow | $0.12 million | $7.86 million |
| Cash and Cash Equivalents | $66.53 million | $59.63 million |
| Total Debt | $0 | $0 |
| Letters of Credit Outstanding | $7.5 million | $7.5 million |
Material Changes vs. Prior Period
- Revenue Decline: Net revenue decreased by 6% ($2.1 million) year-over-year. This was driven by a decrease in billable activity and higher cashback rewards (contra-revenue) due to increased Expensify Card adoption, partially offset by higher interchange revenue.
- Margin Compression: Gross margin percentage declined from 51% to 48% due to the revenue mix shift toward higher cashback rewards.
- Expense Reduction: General and Administrative (G&A) expenses dropped 16% ($1.7 million), primarily due to reduced settlement losses and lower audit fees, though legal fees related to pending litigation increased. Research and Development (R&D) expenses decreased slightly by 2%.
- Cash Flow Volatility: Operating cash flow plummeted from $7.9 million to $0.1 million. This sharp decline was primarily caused by the $9.5 million settlement payment (partially funded by insurance) for a putative class action lawsuit and related legal fees.
- Stock-Based Compensation: Total stock-based compensation expense decreased to $6.0 million from $8.0 million year-over-year.
Outlook, Risks, and Contingencies
- Nasdaq Delisting Risk: On April 17, 2026, the company received a deficiency letter from Nasdaq because its stock price remained below the $1.00 minimum bid price requirement for 30 consecutive business days. The company has until October 14, 2026, to regain compliance, potentially via a reverse stock split. Failure to comply could result in delisting.
- Legal Settlement: The company reached an agreement-in-principle to settle a putative securities class action for $9.5 million. $2.6 million was paid by the company, with $6.9 million recovered via insurance. The settlement was deposited into escrow in Q1 2026, with final approval hearings scheduled for June 30, 2026.
- Share Repurchase Program: The company has a $50.0 million share repurchase program authorized in February 2025. As of March 31, 2026, approximately $41.0 million remains available, though no shares were repurchased in Q1 2026.
- Non-GAAP Performance: Management highlights Adjusted EBITDA of $6.2 million (18% margin) and Non-GAAP Net Income of $3.6 million (11% margin), excluding stock-based compensation and other items.
Investor Verification Checklist
- Verify the status of the Nasdaq compliance plan and the likelihood of a reverse stock split to maintain listing.
- Confirm the final approval of the $9.5 million class action settlement and the exact timing of the cash outflow.
- Monitor the trend in "Paid Members" (632,000 in Q1 2026 vs. 657,000 in Q1 2025) to assess the sustainability of the revenue decline.
- Review the impact of the $7.5 million letter of credit on liquidity and future borrowing capacity.
- Assess the trajectory of cashback rewards as a percentage of revenue, given the increased adoption of the Expensify Card.