Expensify Inc, a prominent payments superapp, disclosed its financial results for the third quarter (Q3) ending September 30, 2023. However, the revelation has been met with a substantial dip in the company’s stock value.
At the time of this publication, Expensify Inc stock (EXFY) has witnessed a decline.
Expensify Inc
Current Price: $1.82
Change : -1.08
Change (%): (-37.24%)
Volume: 3.3M
Source: Tomorrow Events Market Data
Expensify Q3 2023 Results – Financial Overview:
During the period, Expensify reported a total revenue of $36.5 million, indicating a 14% decline in comparison to the corresponding period in the preceding year. Operating activities consumed $5.1 million in cash, while free cash flow stood at a deficit of $(7.1) million. The net loss for Q3 2023 amounted to $17.0 million, contrasting with the $8.2 million loss recorded in the same period last year. The non-GAAP net loss was registered at $6.7 million, with adjusted EBITDA at $(3.5) million. Notably, interchange stemming from the Expensify Card surged to $3.1 million, reflecting a remarkable 65% surge from the previous year.
Strategic Moves:
Following the close of the quarter, the company allocated $36.0 million of available funds to entirely extinguish its term loan debt, exhibiting a proactive approach to financial management.
Business+ Operations:
The number of paid members dwindled to 719,000, a 6% reduction compared to the corresponding period in the prior year. Concurrently, Expensify employees exhibited confidence in the company by acquiring 275,210 shares of common stock, generating gross cash proceeds of $1.1 million for the firm.
Accounting Channel Empowerment:
Expensify disclosed a lucrative incentive for Accounting Partners onboarding clients to the Expensify Card. These partners will now enjoy a 50 basis point share in revenue, solidifying the company’s foothold in the accounting sector.
Strategic Cost Efficiency Measures:
By reducing its debt by $36.0 million in October, the company anticipates a consequent decrease in projected interest expenses for Q4 2023 by $0.9 million, and by $3.8 million for the fiscal year 2024. Furthermore, Expensify foresees additional internal cost-cutting measures that are projected to curtail operational expenses by approximately $15.0 million in 2024. This strategic maneuver is anticipated to pave the way for positive cash flow in 2024 and beyond.
Expensify Card Accounting Transition:
In a significant move, Expensify will assume the role of program manager for the Expensify Card, effective late Q4. This transition will lead to a shift in accounting treatment for newly issued cards, wherein interchange will be classified as revenue rather than contra cost of revenue. Additionally, the company is set to receive a 20% boost in interchange under the new card program.
The unveiling of the Q3 2023 financial results of Expensify has ushered in a transformative phase for the payments superapp. While revenue experienced a downturn, strategic debt reduction and expense-cutting initiatives signal a forward-looking approach. The company’s assumption of program management for the Expensify Card promises to further bolster its financial outlook.
