Expensify’s Migration Strategy and Progress Claims Clash in 2026 Q2 Earnings Call

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $33.9 million (no YOY growth/decline specified, but Expensify Card interchange revenue up 12% YOY)

Guidance:

• Raised full year 2026 free cash flow guidance from $6M-$9M to $12M-$14M.
• July 2026 paid members were 634,000 (usual summer dip, expected to pick up in Q3).

Business Commentary:

Financial Performance and Cash Flow:

• Expensify reported revenue of $33.9 million for Q2 2026, with a notable 12% increase in Expensify Card interchange revenue year-over-year.
• Operating cash flow was $8.4 million, and free cash flow improved to $6.4 million, marking a 162% increase from the previous quarter.
• The improvement in cash flow was driven by disciplined business management and cost control, despite some pressure on the top line.

New Expensify Growth:

• Net new revenue from New Expensify grew by over 250% year-on-year to more than $10 million in ARR.
• The growth is attributed to the product's rapid adoption and its appeal to a much larger market outside the traditional expense management approach.

Capital Allocation and Share Repurchase:

• Expensify repurchased approximately 6.8 million shares of Class A common stock in Q2, representing a 7% reduction in shares outstanding.
• This action reflects the company's conviction in its value and commitment to returning capital to shareholders amidst continued investments in growth.

AI and Product Development:

• The company made significant progress in AI, introducing level 3 workflow automation and custom agents, enhancing product velocity.
• AI features such as agent rules and custom agents are designed to automate routing and decision-making processes, improving efficiency for users.

Classic to New Expensify Migration:

• More users are now on New Expensify than on Classic, marking a significant milestone with over 56% of users migrated.
• The migration is part of a strategy to transition the customer base to the new platform, aiming to address churn in the Classic product base.

Sentiment Analysis:

Overall Tone: Positive

• "Q2 was a quarter where I think the product itself tells the story better than any single number could." "We’re raising our full year 2026 free cash flow guidance..." "This is the usual summer dip, we’d expect things to pick back up as we move through Q3." "It’s been gratifying to see that work recognized externally, too. We were named Expense Management Platform of the Year..."

Q&A:

• Question from Aaron (Analyst): Where are you in terms of sales and marketing investments as well as AI investments relative to 2025 free cash flow?
  Response: Sales/marketing dollars are being deployed, some more coming later. AI spend is scaling but being managed responsibly for potential reduction. A class action lawsuit settlement in Q1 is now behind us, improving visibility.

• Question from Aaron (Analyst): Can you give commentary on the sequential growth of New Expensify net new ARR and whether it's accelerating?
  Response: New Expensify net new revenue grew from around $7M (end of Q1) to over $10M (end of Q2), showing rapid growth. The challenge is balancing the decline of Classic and the rise of New Expensify to determine which dynamic wins first.

• Question from Aaron (Analyst): What % of total ARR comes from New Expensify including migrations?
  Response: Over 56% of users are on New Expensify, which now has more users than Classic. Virtually all new revenue is coming from New Expensify as Classic is no longer sold to new customers.

• Question from Daniel Jester (Analyst): Is there a different monetization opportunity for New Expensify customers versus Classic?
  Response: Fundamentally the business model is the same, but New Expensify is expected to have a much larger addressable market due to its different, simpler experience. New monetization features like Consolidated Travel Billing and potential usage-based models are being explored.

• Question from Daniel Jester (Analyst): What are you seeing in terms of payment volumes and card penetration this quarter?
  Response: Card interchange revenue grew 12% YOY. The 'bring your own card' marketing message is effective. Payment volumes showed a modest quarter-over-quarter increase, continuing consistent growth.

• Question from Daniel Jester (Analyst): How is the sales pipeline and ramping process for travel?
  Response: The new Consolidated Travel Billing feature is unique and exciting, with a large customer waitlist. Travel continues to attract large enterprise customers and is a key business pillar.

Contradiction Point 1

Migration Strategy and Customer Incentives

Contradiction on whether migration incentives will shift from positive to pressure-based.

Aaron (Analyst) - Aaron (Analyst)

2026Q2: The challenge is migrating Classic customers and addressing churn. It's unclear which strategy... will win first. - David Barrett(CEO)

What is the sequential growth rate of the $10M New Expensify ARR (excluding migrated Classic customers), and is it accelerating? - Mark (Analyst)

2026Q1: No such plan. The company prefers to \"pull\" customers over with incentives and positive experience, not threaten them. - David Barrett(CEO)

Contradiction Point 2

User Migration Progress

Contradiction on the reported percentage of Classic customers migrated to New Expensify.

Aaron (Analyst) - Aaron (Analyst)

2026Q2: 56% of users now on New Expensify, more than Classic for the first time. - Ryan Schaffer(CFO)

What is the sequential growth rate of the $10M New Expensify ARR (excluding migrated Classic customers), and is it accelerating to become more significant? - Mark (Analyst)

2026Q1: Approximately 60% of Classic customers have migrated. - David Barrett(CEO)

Contradiction Point 3

Monetization Model for New Expensify

Contradiction on whether the monetization model for New Expensify is fundamentally the same or includes new opportunities.

Daniel Jester (Analyst) - Daniel Jester (Analyst)

2026Q2: The business model is fundamentally the same; New Expensify just executes it better... - David Barrett(CEO)

Are there different monetization strategies for New Expensify customers compared to Classic? - Aaron Kimson

2026Q2: New monetization features are being added (e.g., Consolidated Travel Billing). The company is exploring usage-based monetization and bill pay as future opportunities. - Ryan Schaffer(CFO)

Contradiction Point 4

Proportion of Revenue from New Expensify

Contradictory statements on whether New Expensify revenue is already the majority.

Aaron (Analyst) - Aaron (Analyst)

2026Q2: All new revenue comes from New Expensify. More users now on New Expensify than on Classic (56% of users). - Ryan Schaffer(CFO)

What is the sequential growth rate of New Expensify's $10M ARR (excluding migrated Classic customers), and is it accelerating? - Aaron Kimson (JMP Securities)

20251107-2025 Q3: Migrating customers to New Expensify is a net positive... Less than 50% of revenue is currently on New Expensify. - Ryan Schaffer(CFO)

Contradiction Point 5

Timeline and Progress of User Migration

Contradiction on the speed and completion status of migrating Classic users to New Expensify.

Aaron (Analyst) - Aaron (Analyst)

2026Q2: The challenge is migrating Classic customers and addressing churn. It's unclear which strategy (New Expensify growth overcoming Classic churn vs. accelerating migration) will win first. - David Barrett(CEO)

What is the sequential growth rate of the $10M New Expensify ARR (excluding Classic customers) and is it accelerating to become more significant? - Aaron Kimson (JMP Securities)

20251107-2025 Q3: Migration speed is customer-dependent; the focus is on moving at the fastest rate customers are comfortable with. Significant progress, if not near completion, is hoped for by year-end. - David Barrett(CEO)