Expensify's Q3 2025 Earnings Call: Unveiling Contradictions in Migration Delays, AI Integration, Revenue Timelines, and SMB Strategy

Date of Call: November 6, 2025

Financials Results

• Revenue: $35.1M

Guidance:

• Reiterated fiscal year 2025 free cash flow guidance of $19M to $23M.
• Q4 flash: paid members in October were 653,000 (up from Q3 average of 642,000).
• Target New Expensify feature parity by end of year and accelerating migrations of existing customers toward completion/near-completion by year-end.

Business Commentary:

* Revenue and Member Growth: - Expensify reported revenue of $35.1 million in Q3 2025, with average paid members at 642,000, up to 653,000 in October. - Revenue growth was driven by increased adoption of Expensify Travel and higher interchange fees.

• Product Migration and AI Integration:
• Expensify has migrated nearly all customer data to New Expensify and is now closing new sales on the new platform.

• The migration is aimed at enhancing user experience and leveraging AI capabilities, such as the Concierge AI system, to streamline support and improve operational efficiency.

• Marquee Customer Wins and Travel Growth:

• Expensify won major customer accounts, including the Brooklyn Nets, leading to increased adoption of Expensify Travel.

• The company's travel bookings grew 36% from Q2 and 95% since Q1, highlighting the success of its travel and expense offerings.

• Stock Repurchase and Capital Allocation:

• Expensify repurchased 1.5 million shares of its Class A common stock, totaling approximately $3 million.
• This move aligns with the company's strategy to return capital to shareholders while maintaining a strong balance sheet to fund strategic initiatives.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted product/migration progress: 'New Expensify is essentially done from a feature perspective'; travel bookings grew 36% Q/Q and 95% since Q1; repurchased ~$3M of stock; reiterated FCF guidance $19M–$23M, signaling confidence.

Q&A:

• Question from George Michael Kurosawa (Citigroup Inc., Research Division): Maybe just on this point about chat as the UI for AI... I'm just curious from that head start that you've had, what have been some of the big learnings or capabilities you've incorporated into the platform that when you watch others, you can see maybe them making missteps or where you feel like you have an advantage there?
  Response: Core advantage is a contextual, built‑in, chat‑first AI (single general intelligence) integrated across product contexts so users can reference things naturally without leaving context, unlike bolt‑on solutions.

• Question from George Michael Kurosawa (Citigroup Inc., Research Division): The government shutdowns in the news... any thoughts there from shutdowns in the past or general scenario analysis you guys may have thought through there?
  Response: Management views shutdowns as uncertainty/timing risk for travel—could reduce trips or increase spend if travelers are stranded; overall uncertainty is negative.

• Question from Aaron Kimson (Citizens JMP Securities, LLC, Research Division): I want to dig in on migrations from Expensify Classic to New Expensify, including what percentage of revenue today is on New Expensify after migrating your Collect customers and the time frame over which you expect to get your Control customers... on New Expensify.
  Response: Less than 50% of revenue is on New Expensify today; target feature parity by year‑end and aim for significant/near‑complete migration by year‑end, but timing is controlled by customer readiness and thus uncertain.

• Question from Aaron Kimson (Citizens JMP Securities, LLC, Research Division): Are you seeing any incremental monetization from the customers that have migrated to New Expensify? And what type of internal cost savings do you anticipate from the Concierge agent once you get everyone migrated over to New Expensify?
  Response: Expect lower support costs and reduced platform maintenance from consolidating; New Expensify enables easier card issuance and travel functionality so migrations are net positive monetization-wise.

Contradiction Point 1

Migration from Expensify Classic to New Expensify

It involves the timeline and pace of migrating customers from the classic platform to the new platform, which impacts product adoption and revenue potential.

What is the status of the migration from Expensify Classic to New Expensify, including the current revenue percentage on New Expensify after Collect customer migration and the expected timeline for migrating Control customers, which represent a substantial majority of your revenue? - Aaron Kimson (Citizens JMP Securities, LLC, Research Division)

2025Q3: less than 50% of revenue is currently on New Expensify. - Ryan Schaffer(CFO)

Does the small size of your business hinder your ability to match the product delivery pace of larger competitors? - Aaron Jacob Kimson (Citizens JMP Securities, LLC, Research Division)

2025Q2: We are focused on getting the product to a place where it works well enough to migrate in the next 4 to 6 months. - David Barrett(CEO)

Contradiction Point 2

Impact of AI on Product Development and Market Positioning

It involves the role of AI in product development and how it affects the company's competitive position in the market, which is crucial for strategic planning and investor expectations.

What key learnings or capabilities have you integrated into the platform through early adoption of chat as AI UI, and where do you see advantages over others? - George Michael Kurosawa (Citigroup Inc., Research Division)

2025Q3: The shift to chat-centric designs normalizes enterprise and consumer apps, but it's more difficult to simplify complex enterprise products. Our long-term work in simplifying and integrating AI throughout our application gives us an advantage in pursuing both SMB and enterprise markets. - David Barrett(CEO)

Can AI advancements in expense management impact the competitive advantage for SMB and VSP customers? - Aaron Jacob Kimson (Citizens JMP Securities, LLC, Research Division)

2025Q2: The increasing application of AI product development for expense management use cases have the potential to erode the moat you've built around SMB and VSP customers? - David Barrett(CEO)

Contradiction Point 3

Expensify's Revenue and AI Integration Timeline

It involves discrepancies in the timeline and progress of AI integration, which can impact user experience, competitive positioning, and potential revenue growth.

What is the status of migrations from Expensify Classic to New Expensify, what percentage of current revenue is on New Expensify following the migration of Collect customers, and what is the expected timeline for migrating Control customers (which constitute a substantial majority of your revenue) to New Expensify? - Aaron Kimson (Citizens JMP Securities, LLC, Research Division)

2025Q3: The goal is to have New Expensify match Classic's functionality by the end of the year, and the migration will progress at a pace comfortable for customers. - David Barrett(CEO)

What are the opportunities and challenges in scaling the Touchless AI product for SMBs, and how does this affect your investment strategy? - Maria Ripps (Canaccord Genuity)

2025Q1: The next big thing is a major breakthrough in intelligence technology that will not only power a better Expensify product but will help Expensify become the operating system for travel and expense management. - David Barrett(CEO)

Contradiction Point 4

Expensify's Focus on Small and Mid-Sized Businesses (SMBs)

It highlights differing priorities and strategies for targeting and expanding in the SMB market, which is crucial for revenue growth and market expansion.

Regarding chat as the UI for AI, as early adopters, what key learnings or capabilities have you integrated into the platform where competitors might be making missteps or where you see a competitive advantage? - George Michael Kurosawa (Citigroup Inc., Research Division)

2025Q3: The largest segment of our revenue is business travel, and we're really focused on attacking that head on. - David Barrett(CEO)

Can you outline the growth drivers for the SMB market and your current SMB market share? Additionally, what is your strategy for increasing SMB market share? - Maria Ripps (Canaccord Genuity)

2025Q1: The small to mid-sized business market contributes 35% of our total revenue. Growth is driven by pricing strata, new features, and improved customer support. - David Barrett(CEO)