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Expensify, Inc. (EXFY)

CIK: 0001476840. SIC: 7372 Services-Prepackaged Software. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1476840. Latest filing source: 0001476840-26-000009.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue142,101,000USD20252026-02-26
Net income-21,389,000USD20252026-02-26
Assets185,989,000USD20252026-02-26

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001476840.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric20182019202020212022202320242025
Revenue80,460,00088,072,000142,835,000169,495,000150,687,000139,236,000142,101,000
Net income1,241,000-1,710,000-13,558,000-27,009,000-41,456,000-10,055,000-21,389,000
Operating income1,247,0005,670,000-10,252,000-15,232,000-33,149,000-820,000-18,019,000
Gross profit48,475,00055,658,00089,142,000106,826,00083,799,00074,997,00071,527,000
Diluted EPS0.00-0.06-0.36-0.33-0.50-0.12-0.23
Operating cash flow12,430,0007,585,0005,486,00032,876,0001,559,00023,877,00020,089,000
Capital expenditures3,235,0002,488,0002,706,000585,0001,384,0000.0017,000
Share buybacks14,0000.000.006,000,0003,000,0001,510,0009,095,000
Assets87,733,000183,213,000210,241,000176,784,000173,680,000185,989,000
Liabilities73,664,000106,598,000113,000,00076,040,00045,437,00053,244,000
Stockholders' equity-51,879,000-48,464,000-31,036,00076,615,00097,241,000100,744,000128,243,000132,745,000
Cash and cash equivalents9,990,00034,401,00098,398,000103,787,00047,510,00048,772,00063,080,000
Free cash flow9,195,0005,097,0002,780,00032,291,000175,00023,877,00020,072,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric20182019202020212022202320242025
Net margin1.54%-1.94%-9.49%-15.93%-27.51%-7.22%-15.05%
Operating margin1.55%6.44%-7.18%-8.99%-22.00%-0.59%-12.68%
Return on equity-17.70%-27.78%-41.15%-7.84%-16.11%
Return on assets-1.95%-7.40%-12.85%-23.45%-5.79%-11.50%
Liabilities / equity1.391.160.750.350.40
Current ratio1.622.943.102.023.603.30

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001476840.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2022-Q22022-06-30-0.10reported discrete quarter
2022-Q32022-09-30-0.10reported discrete quarter
2023-Q12023-03-31-0.07reported discrete quarter
2023-Q22023-06-3038,884,000-11,304,000-0.14reported discrete quarter
2023-Q32023-09-3036,494,000-17,003,000-0.21reported discrete quarter
2023-Q42023-12-3135,208,000-7,204,000derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-3133,535,000-3,781,000-0.04reported discrete quarter
2024-Q22024-06-3033,288,000-2,764,000-0.03reported discrete quarter
2024-Q32024-09-3035,409,000-2,198,000-0.02reported discrete quarter
2024-Q42024-12-3137,004,000-1,312,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-3136,074,000-3,169,000-0.03reported discrete quarter
2025-Q22025-06-3035,764,000-8,788,000-0.10reported discrete quarter
2025-Q32025-09-3035,065,000-2,315,000-0.03reported discrete quarter
2025-Q42025-12-3135,198,000-7,117,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-3133,969,000-2,337,000-0.02reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001476840-26-000032.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report"). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A. "Risk Factors" in our 2025 Annual Report and included elsewhere in this Quarterly Report on Form 10-Q. See "Special Note Regarding Forward-Looking Statements."

OVERVIEW

Expensify is a leading cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. Every day, people from all walks of life in organizations around the world use Expensify to scan and reimburse receipts from flights, hotels, coffee shops, office supplies and ride shares. Since our founding in 2008, we have added over 15 million members to our community and processed and automated 1.9 billion expense transactions on our platform as of March 31, 2026, freeing people to spend less time managing expenses and more time doing the things they love. For the quarter ended March 31, 2026, an average of 632,000 paid members across an average of 41,500 companies and over 200 countries and territories used Expensify to make money easy.

MACROECONOMIC TRENDS

Our business and the operations of our customers, the majority of which are small and medium-sized businesses, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and a potential for a recession. Although certain indicators have suggested that inflation has made downward progress, the economy continues to be impacted by elevated inflation rates and faces further inflation risk. Tariff and trade issues, as well as geopolitical uncertainty and instability, including the conflict in the Middle East, also continue to cause overall uncertainty with respect to the economy. See Part I, Item 1A. "Risk Factors" in our 2025 Annual Report and our subsequent filings for further discussion of the possible impact of such macroeconomic trends on our business. Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business.

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Components of Results of Operations

Revenue, Net

We generate revenue from subscription fees based on the usage of our cloud-based expense management software platform under arrangements paid monthly in arrears that are either (i) month-to-month and can be terminated by either party without penalty at any time or (ii) annual arrangements based on a minimum number of monthly members. Annual subscription customers who wish to terminate their contracts before the end of the term are required to pay the remaining obligation in full plus any fees or penalties set forth in the agreement. We charge our customers subscription fees for access to our platform based on the number of monthly active members and level of service. The contractual price is based on either negotiated fees or rates published on our website. We generate most of our revenue from customers who have a credit card or debit card on file with us that is automatically charged each month. Virtually all of our customers have a standard terms of service contract, with the few exceptions for customers on bespoke service contracts.

Our contracts with our customers include two performance obligations: access to the hosted software service, inclusive of all features available within the platform, and the related customer support. We account for the platform access and the support as a combined performance obligation because they have the same pattern of transfer over the same period and are therefore delivered concurrently. We satisfy our performance obligation over time each month as we provide platform access and support services to customers and as such recognize revenue over time. We recognize revenue net of applicable taxes imposed on the related transaction. Revenue earned from subscription fees was $30.9 million and $33.2 million for the three months ended March 31, 2026 and 2025, respectively.

We also offer an Expensify charge card (the "Expensify Card"), which operates under an agreement with the issuing bank, The Bancorp Bank, N.A. ("Bancorp"), to issue Expensify Cards to customers and authorize and settle transactions on the Visa card network.

Under the Expensify Card program, we generate revenue from the authorization and settlement of Expensify Card transactions and are contractually entitled to all interchange generated on Expensify Card transactions based on our agreement with Bancorp. We are the principal in the transaction and recognize interchange as revenue on a gross basis within Revenue, net on the Condensed Consolidated Statements of Operations. Interchange revenue was $5.5 million and $5.0 million for the three months ended March 31, 2026 and 2025, respectively.

We offer a cashback rewards program to all customers under the Expensify Card program based on volume of Expensify Card transactions. Cashback rewards are earned on a monthly basis and are applied against outstanding customer receivables or are paid out the following month. We consider our cashback rewards as consideration payable to a customer, and they are recorded as contra revenue within Revenue, net on the Condensed Consolidated Statements of Operations. Cashback rewards applied against outstanding customer receivables are reflected as a reduction to Accounts receivable, net on the Condensed Consolidated Balance Sheets. Cashback rewards liability is recorded within Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. The cashback rewards fluctuate over time as customers meet eligibility requirements and based on the timing of payments made to customers. The cost of cashback rewards was $2.6 million and $2.3 million for the three months ended March 31, 2026 and 2025, respectively.

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Cost of Revenue, Net

Cost of revenue, net primarily consists of personnel-related expenses, including stock-based compensation, attributable to supporting our customers and maintenance of our platform, amortization expense on capitalized software development costs, expenses related to hosting our service, including the costs of data center capacity, credit card processing fees, third-party software license fees, amortization of finance lease right-of-use assets, outsourcing engineering costs to maintain our platform, and outsourcing costs to support customer service, net of consideration from a vendor under the Expensify Card program for certain volume-based incentives from Visa.

Under the Expensify Card program, we receive consideration from a vendor for certain volume-based incentives from Visa, which are included as a reduction to Cost of revenue, net on the Condensed Consolidated Statements of Operations as they are earned. The amounts earned under these volume-based incentives were $0.3 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.

OPERATING EXPENSES

Research and Development

Research and development expenses consist primarily of personnel-related expenses, including stock-based compensation, and external contributor costs incurred related to the planning and preliminary project stage of new products or enhancing existing products or services. We capitalize certain software development costs that are attributable to developing or adding significant functionality to our internal-use software during the application development stage of the projects. All research and development expenses, excluding capitalized software development costs, are expensed as incurred.

We believe delivering new functionality is critical to attract new customers and expand our relationships with existing customers. We expect to continue to make investments in and expand our product and service offerings to enhance our customers’ experience and satisfaction and to attract new customers.

General and Administrative

General and administrative expenses primarily consist of personnel-related expenses, including stock-based compensation, for any employee time allocated to administrative functions, including finance and accounting, legal and compliance, and human resources. In addition to personnel-related expenses, general and administrative expenses consist of business insurance, rent, utilities, depreciation on property and equipment, amortization of operating lease right-of-use assets, information technology, external professional services, including finance and accounting, audit, tax, legal and compliance, and human resources, third-party software license fees, and settlement losses, net of recoveries.

Sales and Marketing

Sales and marketing expenses primarily consist of personnel-related expenses, including stock-based compensation, advertising expenses, depreciation on property and equipment, outsourcing costs for sales and product demos, branding and public relations expenses, referral fees for strategic partners and other benefits that we provide to our referral and affiliate partners.

Other Income, Net

Other income, net, consists primarily of interest income. It also includes the results of operations of our Fifth & Harvey, LLC subsidiary, which holds title to and manages operations of the operating lease for lots in Portland, Oregon that are currently used to host multiple portable food vendors open to the general public, as well as realized gains and losses on foreign currency transactions and foreign currency remeasurement.

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Provision for Income Taxes

Income taxes primarily consist of income taxes in the United States, United Kingdom, Australia, Netherlands and Canada, as well as states in the United States in which we do business.

On July 4, 2025, H.R.1 was enacted into law, which introduced provisions that modified the Internal Revenue Code (“IRC”), including the immediate expensing of domestic research and development expenditures for tax purposes. As previously required under the Tax Cuts and Jobs Act, we capitalized and amortized research and experimental (“R&D”) expenditures under IRC Section 174 for tax years beginning after December 31, 2021. With the enactment of H.R.1 in 2025, we began deducting domestic Section 174 costs in the year they were incurred. We will continue to capitalize and amortize R&D costs over 15 years for R&D performed outside of the U.S.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table sets forth our results of operations for each of the periods presented (in thousands, except percentages, share and per share data):

Three Months Ended March 31,

2026

2025

Revenue, net

$

33,969 

$

36,074 

Cost of revenue, net(1)

17,798 

17,832 

Gross margin

16,171 

18,242 

Operating expenses:

Research and development(1)

5,265 

5,358 

General and administrative(1)

9,118 

10,829 

Sales and marketing(1)

3,760 

3,542 

Total operating expenses

18,143 

19,729 

Loss from operations

(1,972)

(1,487)

Other income, net

171 

324 

Loss before income taxes

(1,801)

(1,163)

Provision for income taxes

(536)

(2,00

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and in other parts of this Annual Report on Form 10-K.

OVERVIEW

Expensify is a cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. Every day, people from all walks of life in organizations around the world use Expensify to scan and reimburse receipts from flights, hotels, coffee shops, office supplies and ride shares. Since our founding in 2008, we have added over 15 million members to our community and processed and automated over 1.8 billion expense transactions on our platform as of December 31, 2025, freeing people to spend less time managing expenses and more time doing the things they love. For the year ended December 31, 2025, an average of 650,000 paid members across an average of 39,700 companies and over 200 countries and territories used Expensify to make money easy.

OUR BUSINESS MODEL

Our employee-centric product strategy, viral and bottom-up business model, word-of-mouth adoption and unique company culture come together to drive value for our members and a competitive advantage for us. We believe that if we remain hyper-focused on our end-user members, and build great products, our members will continue to drive adoption.

We primarily generate revenue from annual subscriptions to our cloud-based platform, driven by the number of paid members active on a monthly basis. Individuals or companies pay for subscriptions on behalf of themselves, their employees and contractors, who we collectively refer to as members. We define a customer as any member who pays for themselves and zero or more other members, grouped into one or more “expense policies.” This might be an individual, an entire company, or a department of a larger company. The definition of customer inherently excludes sole proprietors on Track or Submit plans.

We monetize transactions from the Expensify Card by receiving interchange for all spend on the card. As we expand our platform, we continue to increase the number of integrations and to more actively promote the Expensify Card with complementary use cases beyond expense management to both new and existing customers to drive increased adoption.

We monetize bookings via Expensify Travel by charging a booking fee on each booking. We intend to continue to develop complimentary features to Expensify Travel to increase the number of existing companies using Expensify Travel and to attract new customers.

Key Factors Affecting Our Performance

Our performance depends on many factors, including the following:

INVESTING IN PRODUCT-LED GROWTH

We continue to focus on growing the number of paid members on our platform. Relative to other software companies, we invest more in product development and less in sales. This investment in product allows us to develop easy-to-use but powerful features that encourage adoption of our platform. Our ability to grow our paid members depends on our viral, bottom-up adoption cycle that starts with an individual employee. After downloading our free app to submit expenses and realizing the benefits of Expensify, our enthusiastic members champion our platform internally, spread it via word-of-mouth or invites to other

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employees and often convince decision makers to adopt Expensify company-wide. In order to continue to grow, we believe we must continue prioritizing investments in our platform to delight our members and drive viral expansion.

CONVERTING FREE MEMBERS

Our success depends on converting users who try the free aspects of the Expensify platform into paid members. While our viral model means that employees or contractors often introduce Expensify into small and medium-sized businesses (“SMBs”), companies subscribe and pay for the majority of our paid members.

INVESTING TO MAINTAIN MARKET CONSENSUS

Our viral and word-of-mouth adoption model is effective in part because we have established ourselves as a recognized leader in expense management for SMBs. We deploy large scale brand advertising to promote our platform strength and create market consensus that Expensify is a category leader for expense management software. For example, in 2024 and 2025, we invested in a promotional marketing opportunity to have Expensify heavily featured in Apple's biggest budget film, F1® The Movie, which was released in theaters on June 27, 2025. We believe investing in market consensus enables us to focus on creating great viral features for our members rather than relying on low-margin, unscalable activities of traditional sales and marketing to drive customer acquisition.

RETAINING EXISTING CUSTOMERS

Expense management touches many functions across a company. To provide a seamless experience for our customers, we integrate with accounting, ERP and travel software used by SMBs and their employees every day. We also have frictionless integrations with many of the technology providers that generate the most receipts for our members, such as Uber and Lyft. Expensify delivers an expense management platform that we believe customers like, and that embeds us within organizations. Because of these two factors, we have historically enjoyed high customer retention rates that often outperform enterprise retention rates. We believe an additional factor that drives our retention rates is that SMBs generally re-evaluate their technology solutions less frequently, and as such, there is rarely a conscious choice around whether to choose to continue using Expensify for another year.

Gross logo retention and net seat retention are important indicators of customer satisfaction and usage of our platform. We calculate our gross logo retention rate as of the end of a period by using (a) the number of distinct companies who have ever had five or more paid members paying for a subscription during the period ending one year prior as the denominator and (b) the number of those same companies that are still paying for at least one subscription during the more recent period as the numerator. In each of 2025 and 2024, our annual gross logo retention was 81%. We calculate our net seat retention rate as of the end of a period by using (a) the number of paid member seats from companies who have ever had five or more paid members paying for a subscription during the period ending one year prior as the denominator and (b) the number of paid member seats at those same companies during the more recent period as the numerator. In 2025 and 2024, our net seat retention was 88% and 86%, respectively. Our growth will depend on our ability to retain existing customers.

INTRODUCING FEATURES TO EXPAND OUR RELATIONSHIP WITH EXISTING CUSTOMERS

We fully launched the Expensify Card in 2020 and we intend to actively promote the Expensify Card to both new and existing customers to drive increased adoption. In 2024, we launched our travel platform, Expensify Travel, as a natural extension of our expense management product. Many companies look for combined travel and expenses solutions in order to streamline the booking to reimbursement flow. Outside of the Expensify Card and Expensify Travel, we have invested, and will continue to invest, in developing features complementary and adjacent to expense management. At most companies, not every employee generates expenses that would be submitted via an expense report on a monthly basis. As we add additional features that are used by all employers, we have the potential to monetize the segment of our customers’ employees that are not submitting expense reports on a monthly basis.

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MACROECONOMIC TRENDS

Our business and the operations of our customers, the majority of which are SMBs, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and a potential for a recession. Although certain indicators have suggested that inflation has made downward progress, the economy continues to be impacted by elevated inflation rates and faces further inflation risk. Tariff and trade issues also continue to cause overall uncertainty with respect to the economy. See the section titled “Risk Factors” in this Annual Report on Form 10-K for further discussion of the possible impact of such macroeconomic trends on our business. Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business.

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Components of Results of Operations

Revenue

We generate revenue from subscription fees based on the usage of our cloud-based expense management software platform under arrangements paid monthly in arrears that are either (i) month-to-month and can be terminated by either party without penalty at any time or (ii) annual arrangements based on a minimum number of monthly members. Annual subscription customers who wish to terminate their contracts before the end of the term are required to pay the remaining obligation in full plus any fees or penalties set forth in the agreement. We charge our customers subscription fees for access to our platform based on the number of monthly active members and level of service. The contractual price is based on either negotiated fees or rates published on our website. We generate most of our revenue from customers who have a credit card or debit card on file with us that is automatically charged each month. Virtually all of our customers have a standard terms of service contract, with the few exceptions for customers on bespoke service contracts.

Our contracts with our customers include two performance obligations: access to the hosted software service, inclusive of all features available within the platform, and the related customer support. We account for the platform access and the support as a combined performance obligation because they have the same pattern of transfer over the same period and are therefore delivered concurrently. We satisfy our performance obligation over time each month as we provide platform access and support services to customers and as such recognize revenue over time. We recognize revenue net of applicable taxes imposed on the related transaction. Revenue earned from subscription fees was $130.5 million and $138.8 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Expensify Card substantially consisted of a single card program that launched in February 2024 (the “Updated Card Program”). The Updated Card Program operates under an agreement with the issuing bank, The Bancorp Bank, N.A. (“Bancorp”), to issue Expensify Cards to customers and authorize and settle transactions on the Visa card network.

Under the Updated Card Program, we generate revenue from the authorization and settlement of Expensify Card transactions and are contractually entitled to all interchange generated on Expensify Card transactions based on our agreement with Bancorp. We are the principal in the transaction and recognize interchange as revenue on a gross basis within Revenue on the Consolidated Statements of Operations. Interchange revenue was $21.3 million and $9.2 million for the years ended December 31, 2025 and 2024, respectively.

We offer a cashback rewards program to all customers on the Updated Card Program based on volume of Expensify Card transactions. Cashback rewards are earned on a monthly basis and are applied against outstanding customer receivables or are paid out the following month. We consider our cashback rewards as consideration payable to a customer, and it is recorded as contra revenue within Revenue on the Consolidated Statements of Operations. Cashback rewards applied against outstanding customer receivables are reflected as a reduction to Accounts receivable, net on the Consolidated Balance Sheets. Cashback rewards liability is recorded within Accrued expenses and other liabilities on the Consolidated Balance Sheets. The cashback rewards fluctuate over time as customers meet eligibility requirements and timing of payments made to customers. The cashback rewards cost was $10.1 million and $8.9 million for the years ended December 31, 2025 and 2024, respectively.

Cost of Revenue, Net

Cost of revenue, net primarily consists of personnel-related expenses, including stock-based compensation, attributable to supporting our customers and maintenance of our platform, amortization expense on capitalized software development costs, expenses related to hosting our service, including the costs of data center capacity, credit card processing fees, third-party software license fees, amortization of finance lease right-of-use assets, outsourcing engineering costs to maintain our platform, outsourcing costs to support customer service and outsourcing costs to support our patented scanning technology

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SmartScan, net of consideration from a vendor under the Updated Card Program for certain volume-based incentives from Visa and consideration from a vendor under our previous card program (the “Legacy Card Program”), which an immaterial number of cardholders continue to operate within, for monetizing Expensify Card activities.

Under the Updated Card Program, we receive consideration from a vendor for certain volume-based incentives from Visa, which are included as a reduction to Cost of revenue, net on the Consolidated Statements of Operations as they are earned. The amounts earned under these volume-based incentives were $1.5 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively.

The Legacy Card Program operates under an agreement with the payment processor, Marqeta, Inc. (“Marqeta”), and relies on Marqeta to manage the relationship with the issuing bank, Sutton Bank, and the card network, Visa, in authorizing and settling transactions. The vendor is contractually entitled to the interchange through its relationships with the card network and card issuing bank. The vendor keeps a portion of the interchange for their services, and our agreement with the vendor results in us receiving the remainder of the interchange. This consideration, net of fees paid to the vendor, is included as a reduction to Cost of revenue, net on the Consolidated Statements of Operations as it is earned. Consideration earned under the Legacy Card Program, net was immaterial for the year ended December 31, 2025. Consideration earned under the Legacy Card Program was $7.2 million, net of $0.8 million of fees paid to the vendor, for the year ended December 31, 2024.

OPERATING EXPENSES

Research and Development

Research and development expenses consist primarily of personnel-related expenses, including stock-based compensation, and external contributor costs incurred related to the planning and preliminary project stage of new products or enhancing existing products or services. We capitalize certain software development costs that are attributable to developing or adding significant functionality to our internal-use software during the application development stage of the projects. All research and development expenses, excluding capitalized software development costs, are expensed as incurred.

We believe delivering new functionality is critical to attract new customers and expand our relationships with existing customers. We expect to continue to make investments in and expand our product and service offerings to enhance our customers’ experience and satisfaction and to attract new customers. We expect research and development expenses will increase as we develop new products and product enhancements.

General and Administrative

General and administrative expenses primarily consist of personnel-related expenses, including stock-based compensation, for any employee time allocated to administrative functions, including finance and accounting, legal and compliance, and human resources. In addition to personnel-related expenses, general and administrative expenses consist of business insurance, rent, utilities, depreciation on property and equipment, amortization of operating lease right-of-use assets, information technology, external professional services, including finance and accounting, audit, tax, legal and compliance, and human resources, third-party software license fees, settlement losses, net of recoveries, and legal settlements. We expect that general and administrative expenses will remain consistent as it relates to costs associated with being a publicly traded company, including legal, audit, business insurance and consulting fees.

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Sales and Marketing

Sales and marketing expenses primarily consist of personnel-related expenses, including stock-based compensation, advertising expenses, depreciation on property and equipment, outsourcing costs for sales and product demos, branding and public relations expenses, referral fees for strategic partners and other benefits that we provide to our referral and affiliate partners. We expect sales and marketing expenses will decrease following our title sponsorship of F1® The Movie, which was released in theaters in June 2025.

Other Income (Expense), Net

Other income (expense), net, consists primarily of interest income. It also includes the results of operations of our Fifth & Harvey, LLC subsidiary, which holds title to and manages operations of the operating lease for lots in Portland, Oregon that are currently used to host multiple portable food vendors open to the general public, as well as realized gains and losses on foreign currency transactions, foreign currency remeasurement, and interest expense under our credit facilities with Canadian Imperial Bank of Commerce (“CIBC”).

Provision for Income Taxes

Income taxes primarily consist of income taxes in the United States, United Kingdom, Australia, Netherlands and Canada, as well as states in the United States in which we do business.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report on Form 10-K.

The following table sets forth our results of operations for the periods presented (in thousands, except percentages, share and per share data):

Year Ended December 31,

2025

2024

Revenue

$

142,101 

$

139,236 

Cost of revenue, net(1)

70,574 

64,239 

Gross margin

71,527 

74,997 

Operating expenses:

Research and development(1)

20,683 

24,638 

General and administrative(1)

42,121 

38,382 

Sales and marketing(1)

26,742 

12,797 

Total operating expenses

89,546 

75,817 

Loss from operations

(18,019)

(820)

Other income (expense), net

1,726 

(1,572)

Loss before income taxes

(16,293)

(2,392)

Provision for income taxes

(5,096)

(7,663)

Net loss

$

(21,389)

$

(10,055)

Net loss per share

Basic and diluted

$

(0.23)

$

(0.12)

Weighted average shares of common stock used to compute net loss per share:

Basic and diluted

92,283,974 

87,380,708 

Net loss margin

(15)

%

(7)

%

(1)Includes stock-based compensation expense as follows (in thousands):

Year Ended December 31,

2025

2024

Cost of revenue, net

$

10,637 

$

12,506 

Research and development

7,701 

11,900 

General and administrative

4,768 

6,815 

Sales and marketing

3,472 

2,316 

Total stock-based compensation expense

$

26,578 

$

33,537 

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COMPARISON OF THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Revenue

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Revenue

$

142,101 

$

139,236 

$

2,865 

2 

%

Revenue increased $2.9 million, or 2%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to an increase in interchange revenue driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program. This increase was partially offset by (i) a decrease in billable activity across our user base, including a decrease in pay-per-use billable activity which has a higher average fee per member than our annual members, and (ii) an increase in contra revenue related to cashback payments driven by the increased adoption and spend captured from members using the Expensify Card.

Cost of Revenue, Net and Gross Margin

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Cost of revenue, net

$

70,574 

$

64,239 

$

6,335 

10 

%

Gross margin

$

71,527 

$

74,997 

$

(3,470)

(5)

%

Gross margin %

50 

%

54 

%

Cost of revenue, net increased by $6.3 million, or 10%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to (i) a decrease in consideration earned under the Legacy Card Program driven primarily by a shift in cardholder spend from the Legacy Card Program to the Updated Card Program, (ii) an increase in payment processing fees, and (iii) an increase in amortization expense related to capitalized software. This increase was partially offset by a decrease in SmartScan costs due to increased use of AI instead of human agents.

Gross margin decreased to 50% for the year ended December 31, 2025 compared to 54% in the same period in 2024 due to the factors described in the preceding paragraphs for Revenue and Cost of revenue, net.

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Research and Development

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Research and development

$

20,683 

$

24,638 

$

(3,955)

(16)

%

Research and development expenses decreased by $4.0 million, or 16%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to a decrease in employee and external contributor time spent on project initiatives and new product features as a result of increased focus on sales and marketing efforts related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025.

General and Administrative

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

General and administrative

$

42,121 

$

38,382 

$

3,739 

10 

%

General and administrative expenses increased $3.7 million, or 10%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to (i) the estimated liability, net of the Company's expected insurance recoveries, related to the Putative Class Action discussed under Part I, Item 3 “Legal Proceedings” and the related increase in legal fees, and (ii) an increase in settlement losses, net of recoveries. This increase was partially offset by a decrease in business insurance costs.

Sales and Marketing

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Sales and marketing

$

26,742 

$

12,797 

$

13,945 

109 

%

Sales and marketing expenses increased $13.9 million, or 109%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to (i) an increase in advertising spend related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025, and (ii) an increase in time spent on sales and marketing activities.

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Other Income (Expense), Net

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Other income (expense), net

$

1,726 

$

(1,572)

$

3,298 

210 

%

Other income (expense), net changed by $3.3 million, or 210%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to (i) period-over-period favorability in net foreign currency gains/losses, (ii) a decrease in interest expense incurred due to the repayments of the revolving credit facility and amortizing term mortgage in 2024 discussed below under “Liquidity and Capital Resources—Credit Facilities”, and (iii) an increase in interest income.

Provision For Income Taxes

Year Ended December 31,

Change

2025

2024

Amount

%

(in thousands, except percentages)

Provision for income taxes

$

(5,096)

$

(7,663)

$

2,567 

33 

%

We recorded a provision for income taxes of $5.1 million for the year ended December 31, 2025 compared to a $7.7 million provision for income taxes for the year ended December 31, 2024. The change in provision is primarily due to an increase in loss before income taxes as a result of increased expenses related to our title sponsorship of F1® The Movie. We follow the asset and liability method of accounting for income taxes, whereby we recognize deferred income taxes for the tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of the assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. During the years ended December 31, 2025 and 2024, we recorded an incremental valuation allowance of $4.3 million and $0.9 million, respectively. The provision for income taxes reflects taxable income earned and taxed in U.S. federal and state, and non-U.S. jurisdictions.

Our effective income tax rate was (31.3)% and (320.4)%, for the years ended December 31, 2025 and 2024, respectively. The effective income tax rate differs from the statutory rate in 2025 primarily due to nondeductible stock-based compensation and the change in the valuation allowance. The effective income tax rate differs from the statutory rate in 2024 primarily due to nondeductible stock-based compensation, the compensation limits imposed by the Internal Revenue Code Section 162(m), and the change in the valuation allowance.

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through our cash flow from operations, sales of our equity securities and borrowings under our credit facilities. As of December 31, 2025, we had $63.1 million in cash and cash equivalents, with no outstanding indebtedness and a $7.5 million letter of credit outstanding.

Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support growth in our business and our need to respond to business opportunities, challenges or unforeseen circumstances. We believe that our existing cash resources will be sufficient to finance our continued operations and growth strategy for the next 12 months and the foreseeable future.

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CASH FLOWS

The following table summarizes our cash flows for the periods indicated (in thousands):

Year Ended December 31,

2025

2024

Net cash provided by operating activities

$

20,089 

$

23,877 

Net cash used in investing activities

(3,555)

(7,628)

Net cash used in financing activities

(2,744)

(22,073)

Net increase (decrease) in cash and cash equivalents and restricted cash

$

13,790 

$

(5,824)

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash provided by operating activities was $20.1 million for the year ended December 31, 2025 as compared to $23.9 million for the same period in 2024, primarily due to (i) an increase in marketing and advertising spend related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025, and (ii) a decrease in subscription revenue. This decrease was partially offset by (i) an increase in interchange revenue driven by the increased adoption and spend captured from members using the Expensify Card, and (ii) a decrease in SmartScan costs.

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities was $3.6 million for the year ended December 31, 2025, primarily consisting of software development costs.

Net cash used in investing activities decreased for the year ended December 31, 2025 compared to the same period in 2024, primarily due to a decrease in employee and external contributor software development costs.

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in financing activities was $2.7 million for the year ended December 31, 2025, primarily consisting of the repurchase and retirement of common stock, partially offset by proceeds from common stock purchased under the 2021 Stock Purchase and Matching Plan (the “Matching Plan”).

Net cash used in financing activities was $22.1 million for the year ended December 31, 2024, primarily consisting of the repayment of the revolving credit facility and the amortizing term mortgage, and the repurchase and retirement of common stock, which was partially offset by proceeds from common stock purchased under the Matching Plan.

Share Repurchase Program

On May 10, 2022, the Executive Committee of the Board of Directors (the “Executive Committee”) approved a share repurchase program with authorization to purchase up to $50.0 million of shares of Class A common stock (“2022 Share Repurchase Program”). The 2022 Share Repurchase Program authorized us to repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with applicable securities laws and other restrictions. The 2022 Share Repurchase Program, which would have expired in March 2025, was replaced with the 2025 Share Repurchase Program described below.

On February 25, 2025, the Executive Committee approved a new share repurchase program with authorization to purchase up to $50.0 million of shares of Class A common stock that expires on March 31, 2028 (“2025 Share Repurchase Program”). Under the 2025 Share Repurchase Program, we may repurchase shares from time to time through open market purchases, in privately negotiated transactions

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or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable securities laws and other restrictions. The actual timing and total amount of future repurchases are subject to business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, restrictions under the terms of our current and future debt agreements and other considerations. The 2025 Share Repurchase Program does not obligate us to acquire any particular amount of Class A common stock, and the program may be suspended or terminated by us at any time at our discretion without prior notice.

As of December 31, 2025, there was approximately $41.0 million remaining under the 2025 Share Repurchase Program, not including amounts used for net share settlement of vested equity incentive awards.

See Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information.

CREDIT FACILITIES

Amortizing Term Mortgage

In August 2019, we entered into an $8.3 million amortizing term mortgage agreement with CIBC for our commercial building located in Portland, Oregon. The agreement required principal and interest payments due each month over a five-year period. Interest accrued at a fixed rate of 5.00% per year until August 2024, at which point the remaining outstanding principal balance on the amortizing term mortgage was due in full. The borrowings were secured by the building. On August 29, 2024, we repaid in full the then-outstanding balance of $7.6 million and an immaterial amount of accrued interest and terminated the associated mortgage agreement with CIBC and secured promissory note. See Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information.

Loan and Security Agreement

In February 2024, we entered into a Second Amended and Restated Loan and Security Agreement (as amended by the amendments described below, the “2024 Amended Loan and Security Agreement”) with CIBC. The 2024 Amended Loan and Security Agreement provided for a $25.0 million revolving credit facility that was set to expire in September 2025. Borrowings under the revolving credit facility accrued interest at CIBC’s reference rate plus 1.00% and were secured by substantially all of our assets.

The 2024 Amended Loan and Security Agreement was amended (i) in May 2024 to amend the covenant restricting the amount of repurchases of common stock to allow for certain additional repurchase activity and provide a waiver for our non-compliance during prior periods, (ii) in August 2024 to permit our wholly-owned subsidiary, 401 SW 5th Ave LLC, to remain an excluded subsidiary, and (iii) in February 2025 to amend the covenant restricting the amount of repurchases of common stock to allow for certain additional net share settlement activity.

In April 2024, we entered into an irrevocable standby letter of credit (the “Letter of Credit”) issued under the 2024 Amended Loan and Security Agreement to reduce cash collateral requirements in connection with the Updated Card Program. The Letter of Credit was issued in the amount of $1.0 million for the benefit of Bancorp. The Letter of Credit was renewed on February 28, 2025 and expires on March 20, 2026. On April 16, 2025, we entered into an amendment to the irrevocable standby letter of credit to increase the Letter of Credit to $7.5 million.

On July 10, 2024, the then-outstanding balance of $15.0 million and an immaterial amount of accrued interest under the revolving credit facility were repaid in full.

On July 1, 2025, we terminated the revolving credit facility under the 2024 Amended Loan and Security Agreement. At the time of such termination, we had no borrowings under the revolving credit facility, and certain terms of the 2024 Amended Loan and Security Agreement, including collateral security, survived the termination with respect to outstanding Contingent Obligations (as defined in the 2024 Amended Loan

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and Security Agreement) arising from Bank Services (as defined in the 2024 Amended Loan and Security Agreement). The Letter of Credit, which had no amounts drawn, also remained outstanding. There were no penalties incurred by us as a result of the termination of the revolving credit facility.

See Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information.

Letter of Credit Security Agreement

On October 9, 2025, we entered into a Letter of Credit Facility and Security Agreement (the “LOC Security Agreement”) with CIBC. The LOC Security Agreement, among other things, provides for the issuance of additional irrevocable standby letters of credit, governs the terms of the outstanding Letter of Credit originally issued under the 2024 Amended Loan and Security Agreement, and grants to CIBC, for the ratable benefit of the lenders, a security interest in substantially all of our assets and its subsidiaries, and also replaces the 2024 Amended Loan and Security Agreement with respect to the Contingent Obligations described above. Under the LOC Security Agreement, the Letter of Credit remained at $7.5 million with an expiration date of March 20, 2026. No amounts had been drawn on the Letter of Credit as of December 31, 2025.

Certain Covenants

We are subject to customary covenants under the LOC Security Agreement which, unless waived by CIBC, restrict our and our subsidiaries’ ability to, among other things, incur certain additional indebtedness, create or incur certain liens, permit a change of control, sell or transfer assets, pay dividends or make distributions, subject to certain exceptions.

As of December 31, 2025, we were in compliance with all debt covenants under the LOC Security Agreement.

Key Business Metrics and Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (“GAAP”) with certain business metrics and non-GAAP financial measures which we regularly review to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Accordingly, we believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for our financial information presented in accordance with GAAP and may be different from similarly titled metrics or measures presented by other companies.

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KEY BUSINESS METRICS

Paid Members

We believe that our ability to increase the number of paid members on our platform will drive our success as a business. Our customers pay for subscriptions on behalf of employees and contractors who use the platform, whom we refer to as paid members. We define paid members as the average number of users (employees, contractors, volunteers, team members, etc.) who are billed on Collect or Control plans during any particular quarter. For SMBs or sole proprietors with only one employee, the business owner may also be the only paid member.

The following table sets forth the average number of paid members for the quarters ended March 31, 2024 through December 31, 2025 (in thousands):

Quarter ended

Paid members

March 31, 2024

688

June 30, 2024

684

September 30, 2024

684

December 31, 2024

687

March 31, 2025

657

June 30, 2025

652

September 30, 2025

642

December 31, 2025

650

NON-GAAP FINANCIAL MEASURES

Limitations of Non-GAAP Financial Measures

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.

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Reconciliations of Non-GAAP Financial Measures

The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net loss excluding provision for income taxes, other (income) expense, net, depreciation and amortization and stock-based compensation expense. We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period. We are focused on profitable growth and we consider adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that are not indicative of the core operating performance of our business.

Year Ended December 31,

2025

2024

(in thousands, except percentages)

Net loss

$

(21,389)

$

(10,055)

Net loss margin

(15)

%

(7)

%

Add:

Provision for income taxes

5,096 

7,663 

Other (income) expense, net

(1,726)

1,572 

Depreciation and amortization

8,299 

6,655 

Stock-based compensation expense

26,578 

33,537 

Adjusted EBITDA

$

16,858 

$

39,372 

Adjusted EBITDA margin

12 

%

28 

%

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Non-GAAP Net Income and Non-GAAP Net Income Margin

We define non-GAAP net income as net loss excluding stock-based compensation expense. We define non-GAAP net income margin as non-GAAP net income divided by revenue for the same period. We are focused on profitable growth and we consider non-GAAP net income to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of stock-based compensation, which is not considered indicative of the core operating performance of our business.

Year Ended December 31,

2025

2024

(in thousands, except percentages)

Net loss

$

(21,389)

$

(10,055)

Net loss margin

(15)

%

(7)

%

Add:

Stock-based compensation expense

26,578 

33,537 

Non-GAAP net income

$

5,189 

$

23,482 

Non-GAAP net income margin

4 

%

17 

%

Free Cash Flow and Free Cash Flow Margin

We define free cash flow as net cash provided by operating activities excluding changes in settlement assets, net and settlement liabilities, which represent funds held for customers and customer funds in transit, respectively, reduced by the purchases of property and equipment and software development costs. We define free cash flow margin as free cash flow divided by revenue for the same period. We are focused on profitable growth and we consider free cash flow to be an important measure because it helps illustrate underlying trends in our business that could otherwise be masked by the effect of the cash flows that are not indicative of the core operating performance of our business.

Year Ended December 31,

2025

2024

(in thousands, except percentages)

Net cash provided by operating activities

$

20,089 

$

23,877 

Operating cash flow margin

14 

%

17 

%

Changes in settlement assets and liabilities:

Settlement assets, net

2,054 

2,469 

Settlement liabilities

1,300 

5,145 

Less:

Purchase of property and equipment

(17)

— 

Software development costs

(3,538)

(7,628)

Free cash flow

$

19,888 

$

23,863 

Free cash flow margin

14 

%

17 

%

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Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of December 31, 2025 (in thousands):

Payments due by period

Less than 1 year

1-3 years

More than 3 years

Total

Finance lease commitments

$

102 

$

— 

$

— 

$

102 

Operating lease commitments

1,018 

2,096 

4,499 

7,613 

Total

$

1,120 

$

2,096 

$

4,499 

$

7,715 

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms whereby we agree to indemnify customers, issuing banks, card networks, vendors and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Changes in Stockholders' Equity, or Consolidated Statements of Cash Flows.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our consolidated financial statements included elsewhere herein have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For our accounting policies, see Note 2 to our consolidated financial statements contained elsewhere herein for a description of our significant accounting policies.

REVENUE RECOGNITION

We generate revenue from subscription fees paid by our customers to access and use our hosted software services, as well as standard customer support.

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Our contracts are either month-to-month arrangements billed monthly in arrears based on a specified number of members or annual arrangements billed monthly in arrears based on a minimum number of

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monthly members. Month-to-month contracts can be terminated by either party at any time without penalty. Annual subscription customers who wish to terminate their contracts before the end of the term are required to pay the remaining obligation in full plus any fees or penalties set forth in the agreement.

We charge customers subscription fees for access to our platform based on the number of monthly members and level of service. The contractual price per member is based on either negotiated fees or rates published on our website. Our contracts with customers include two performance obligations: access to the hosted software service (“SaaS”), inclusive of all features available within the platform and related customer support. The SaaS and the support are accounted for as a combined performance obligation because they have the same pattern of transfer over the same period and, therefore, are delivered concurrently. We satisfy our performance obligation over time each month as it provides the SaaS and support services to customers and as such recognizes revenue monthly based on the number of monthly members and contractual rate per member.

Certain annual contracts provide the customer the option to increase the minimum number of members and extend the contract term on a prospective basis or to purchase members beyond the minimum contracted number of members at a higher rate for a particular month. These options are accounted for when the customer exercises the option as they do not represent a material right and are accounted for as a contract modification.

Revenue is recognized net of applicable taxes imposed on the related transaction. We charge customers on a monthly basis, in arrears, with typical payment terms being 30 days. Since our performance obligation is satisfied monthly, at any reporting period, we have no unsatisfied, or partially unsatisfied, performance obligations.

Under the Updated Card Program, we generate revenue from the authorization and settlement of Expensify Card transactions. We partner with an issuing bank to issue Expensify Cards to customers as a feature of the Company’s SaaS. Our agreement with the issuing bank allows for card transactions to be authorized and settled on the Visa network. We are contractually entitled to all interchange generated on Expensify Card transactions based on our agreement with the issuing bank. Based on our agreements with the payment processor and issuing bank, we are the principal in the transaction. As such, we recognize interchange as revenue on a gross basis within Revenue on the Consolidated Statements of Operations.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements in this Annual Report on Form 10-K for recently issued and adopted accounting pronouncements.

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