EXFY

Expensify, Inc.

NASDAQ · TECHNOLOGY · SERVICES-PREPACKAGED SOFTWARE

2.44

−0.07 −2.79%

USD · close Oct 27

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MKT CAP $88.4MP/E —DIV YIELD —FCF YIELD —REV TTM $138.1M −4.3%NET INCOME −$15.6MNET DEBT $1.6M52W 0.75 – 2.72SEC XBRL · TTM TO Invalid Date

How EXFY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

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New in FY2025

Our quarterly and annual financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of demand across our platform and for individual features within our platform; • our ability to grow or maintain our gross logo retention rate and net seat retention rate (each as described in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations”), expand usage within organizations, retain and increase sales to existing customers and attract new members and customers; • our ability to convert individuals and organizations using our free features or trial subscriptions into paying customers; • our ability to predictably generate revenue through marketing and sales efforts; • the timing and success of new features, integrations, capabilities and enhancements by us to our platform, or by our competitors to their products, or any other changes in the competitive landscape of our market; • our ability to grow and maintain our relationships and/or integrations with our network of third-party partners, including integration partners, channel partners and professional service partners; • our ability to regulate members and member interactions on an increasingly collaborative platform; • our ability to grow revenue share and customer referrals from our partner ecosystem; • our ability to attract new customers and retain existing customers; • the success of our customers’ businesses; • our ability to achieve widespread acceptance and use of our platform and features, including the Expensify Card and any new features we may introduce; • our ability to retain customers on annual subscriptions; • our ability to maintain and improve employee efficiency, and our ability to manage third party, outsourced or open source workers to provide value-added services like receipt processing, customer support and engineering; • errors in our forecasting of the demand for our platform and features, which would lead to lower revenue, increased costs, or both; • the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive; • the timing of expenses and recognition of revenue; • actual or perceived security breaches, technical difficulties, or interruptions to our platform and features; • pricing pressure as a result of competition or otherwise; • ineffective pricing strategies that could limit customer base expansion, revenue growth and subscription renewals; • adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs; • the number of new employees hired; • the timing of the grant or vesting of equity awards to employees, directors, or consultants; • declines in the values of foreign currencies relative to the U.S. dollar; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs in new and existing markets; • costs and timing of expenses related to the potential acquisition of talent, technologies, businesses or intellectual property, and their integration, including potentially significant amortization costs and possible write-downs; • health crises or other conditions that impact travel and business spending; and • general economic and market conditions in either domestic or international markets, including geopolitical uncertainty and instability and their effects on software spending.
We believe our growth depends on a number of factors, including, but not limited to, our ability to: • attract new individuals and organizations to use our features, particularly our expense management feature; • convert individuals and organizations using our free features or trial subscriptions into paying customers; • grow or maintain our gross logo retention rate and net seat retention rate, and expand usage within organizations; • price our subscription plans effectively and competitively; • retain our existing individual and organizational customers; • achieve widespread acceptance and use of our platform and features, including in markets outside of the United States; • continue to successfully advance our bottom-up sales strategy as well as strategic relationships with our channel partners; • continue to maintain and build a platform and brand that drives word-of-mouth exposure to new potential members; • grow or maintain our brand through marketing, advertising campaigns, partnerships and other methods; • gain member traction for and generate revenue from our new features and services; • grow or maintain current levels of interchange revenue and/or fees generated through transaction-based features; • expand the features and capabilities of our platform and features; • provide excellent customer experience and customer support; • maintain the security and reliability of our platform and features; • maintain the trust of our customers; • successfully compete against established companies and new market entrants, as well as existing software tools; • successfully respond to other competitive challenges in the United States and globally; • attract, hire and retain highly skilled personnel; • the impact of any future pandemic, epidemic or other public health crisis on our business; • obtain, expand, maintain, enforce and protect our intellectual property portfolio; • operate as a public company; • grow our member and customer base in new countries and/or markets, and increase awareness of our brand on a global basis; and • obtain and maintain compliance and licenses material to our current and future businesses, and comply with existing and new applicable laws and regulations including in markets outside of the United States.
We cannot guarantee any price increases we may choose to implement in the future will not adversely affect our business.
For example, we have been migrating users onto New Expensify, our open-source financial group chat, which we have been developing since 2021, but there can be no guarantee that it will meet customer needs, gain member traction or generate revenue sufficient to offset the costs of development, which could harm our business.
As of December 31, 2025, businesses with fewer than 1,000 employees accounted for approximately 95% of our customers by revenue, and we focus our product, marketing and sales efforts on these businesses, including SMBs.
Responding to such conflicting, complex or changing rules and regulations entails inherent costs, and any actual or perceived failure to comply with existing or new laws and regulations, or orders of any governmental authority, including changes to or expansion of their interpretations, may subject us to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets, restrictions and expulsion from card acceptance programs, enforcement actions in one or more jurisdictions, result in additional compliance and licensure requirements, and increased regulatory scrutiny of our business.
Expensify Payments LLC (“Expensify Payments”) is a licensed money transmitter (or its equivalent) in most U.S. states and territories.
The loss of one or both of our executive officers or other key employees could have a serious adverse effect on our business.
On February 25, 2025, the Executive Committee of our Board of Directors (the “Executive Committee”) authorized a share repurchase program to repurchase up to $50 million of our outstanding Class A common stock, which replaced the Company's share repurchase program that was approved in 2022.
For our previous card program (the “Legacy Card Program”), launched in 2020, we rely on a single third-party vendor, Marqeta, for the Expensify Card, who also manages the relationship with the card's issuing bank, Sutton Bank, and the card network, Visa.
In the annual period ended December 31, 2025, consideration from this vendor representing monetized Expensify Card activities reduced our cost of revenue by an immaterial amount.
In the annual period ended December 31, 2024, consideration from this vendor representing monetized Expensify Card activities reduced our cost of revenue by $7.2 million.
Under our updated card program (the “Updated Card Program”), which launched in February 2024 and covers substantially all cardholders, we rely on Marqeta as the payment processor, Bancorp as the card’s issuing bank, and Visa as the card network.
In the annual periods ended December 31, 2025 and 2024, interchange revenue earned under the Updated Card Program was $21.3 million and $9.2 million, respectively.
We and our third-party providers are exposed to cybersecurity risks and incidents that may damage our reputation and brand, cause material financial penalties, and result in legal liability, any of which could substantially harm our business, financial condition, and results of operations.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems, including tools that circumvent security controls, evade detection, and remove forensic evidence, change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
Additionally, many of our employees and service providers work remotely.
As a result, we may be more vulnerable to cybersecurity-related events such as phishing attacks and other security challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Additionally, any integration of artificial intelligence in our or any service providers' operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
Any adverse impact to the availability, integrity, or confidentiality of our IT Systems or Confidential Information can result in intentional or accidental unauthorized access to our IT Systems or our customers’ or partners’ sites, networks, systems and accounts; unauthorized access to, and misappropriation or disclosure of Confidential Information; viruses, worms, spyware, ransomware, or other malware being served from our platform, mobile application, networks, or systems, including as a result of supply chain attacks; deletion or modification of content or the display of unauthorized content on our platform; interruption, disruption, or malfunction of operations; costs relating to incident response, system restoration or remediation, future compliance, deployment of additional personnel and protection technologies, and response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or risk of loss, litigation or proceedings (such as class actions), regulatory action, fines and penalties, and other potential liabilities.
Any or all of the foregoing could materially adversely affect our business, results of operations and financial condition.
For example, we have been migrating users onto New Expensify, an open-source financial group chat optimized for financial conversations that we have been developing since 2021, but there can be no assurance that this initiative will achieve customer acceptance or that we will realize the anticipated return on our investment.
For example we use AI Technologies to optimize our internal processes, including, but not limited to, analyzing and processing receipts, bills, and invoices, responding to customer support requests, and drafting personalized marketing communications.
In particular, if the models underlying our AI Technologies are: incorrectly implemented; reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data; used without sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats, data privacy concerns, or material performance issues, the performance of our products, services and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.
We use AI Technologies licensed from third parties, such as OpenAI and Anthropic, in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to such specific third parties' software and infrastructure.
Additionally, our reliance on third-party AI Technologies, such as those licensed from OpenAI and Anthropic, involves certain data privacy and security risks.
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have enacted or are currently considering laws and regulations governing AI.
Additionally, existing laws and regulations may be interpreted or enforced in ways that would affect the operation of our AI Technologies, or could be rescinded or amended as new administrations take differing approaches to evolving AI Technologies.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict the impact future laws, regulations, or standards, or the market perception of their requirements, may have on our business or how we will respond to these laws or regulations.
Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies have been enacted in China and either entered into force in the United States and the EU in 2024 and 2025 or are expected to enter into force in 2026.
In the United States, legislation related to the use of automated decision making has been introduced at the federal level and enacted or proposed at the state level as well.
Some enacted or proposed frameworks include requirements focused on transparency, risk-management and accountability for AI Technologies, while others focus on high-risk uses of AI, the use of automated decision-making technology or companies that are developers or deployers of AI Technologies.
For example, the California Privacy Protection Agency finalized regulations under the California Consumer Privacy Act regarding the use of automated decision making.
Numerous other states have enacted, passed, or are considering AI-focused legislation, creating a patchwork of regulations and a complex compliance challenge.
Furthermore, the Trump administration’s approach to investment in and regulation of AI Technologies has and is expected to continue to deviate from that of the previous administration and we will need to adapt to any changes that may result from such approach, including as the result of new or changing executive orders.
These new regulations and any subsequent laws or regulations may present additional complexity and risk to our business, particularly but not limited to where these laws overlap with privacy laws designed to protect individuals.
Any or all of the foregoing regulatory developments could affect our use of AI and our ability to provide, improve or commercialize our services, require changes to our operations and processes, and materially adversely affect our business, results of operations, and financial condition.
Further, any failure or perceived failure by us to comply with existing or newly enacted laws, regulations and other requirements relating to AI Technologies could result in legal claims or proceedings (including class actions), regulatory investigations or enforcement actions.
It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition, antitrust, data privacy and consumer protection laws, may be interpreted or enforced in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies.
Such an increase in operating expenses could adversely affect our business, financial condition and results of operations.

and 37 more.

Gone since FY2024

Our quarterly and annual financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of demand across our platform and for individual features within our platform; • our ability to grow or maintain our gross logo retention rate and net seat retention rate (each as described under the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance—Retaining Existing Customers"), expand usage within organizations, retain and increase sales to existing customers and attract new members and customers; • our ability to convert individuals and organizations using our free features or trial subscriptions into paying customers; • our ability to predictably generate revenue through marketing and sales efforts; • the timing and success of new features, integrations, capabilities and enhancements by us to our platform, or by our competitors to their products, or any other changes in the competitive landscape of our market; • our ability to grow and maintain our relationships and/or integrations with our network of third-party partners, including integration partners, channel partners and professional service partners; • our ability to regulate members and member interactions on an increasingly collaborative platform; • our ability to grow revenue share and customer referrals from our partner ecosystem; • our ability to attract new customers and retain existing customers; • the success of our customers’ businesses; • our ability to achieve widespread acceptance and use of our platform and features, including the Expensify Card and any new features we may introduce; • our ability to retain customers on annual subscriptions; • our ability to maintain and improve employee efficiency, and our ability to manage third party, outsourced or open source workers to provide value-added services like receipt processing, customer support and engineering; • errors in our forecasting of the demand for our platform and features, which would lead to lower revenue, increased costs, or both; • the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive; • the timing of expenses and recognition of revenue; • actual or perceived security breaches, technical difficulties, or interruptions to our platform and features; • pricing pressure as a result of competition or otherwise; • ineffective pricing strategies that could limit customer base expansion, revenue growth and subscription renewals; • adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs; • the number of new employees hired; • the timing of the grant or vesting of equity awards to employees, directors, or consultants; • declines in the values of foreign currencies relative to the U.S. dollar; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs in new and existing markets; • costs and timing of expenses related to the potential acquisition of talent, technologies, businesses or intellectual property, and their integration, including potentially significant amortization costs and possible write-downs; • health crises, such as the COVID-19 pandemic, or other conditions that impact travel and business spending; and • general economic and market conditions in either domestic or international markets, including geopolitical uncertainty and instability and their effects on software spending.
We believe our growth depends on a number of factors, including, but not limited to, our ability to: • attract new individuals and organizations to use our features, particularly our expense management feature; • convert individuals and organizations using our free features or trial subscriptions into paying customers; • grow or maintain our gross logo retention rate and net seat retention rate, and expand usage within organizations; • price our subscription plans effectively and competitively; • retain our existing individual and organizational customers; • achieve widespread acceptance and use of our platform and features, including in markets outside of the United States; • continue to successfully advance our bottom-up sales strategy as well as strategic relationships with our channel partners; • continue to maintain and build a platform and brand that drives word-of-mouth exposure to new potential members; • grow or maintain our brand through marketing, advertising campaigns, partnerships and other methods; • gain member traction for and generate revenue from our new features and services; • grow or maintain current levels of consideration from a vendor and/or fees generated through transaction-based features; • expand the features and capabilities of our platform and features; • provide excellent customer experience and customer support; • maintain the security and reliability of our platform and features; • maintain the trust of our customers; • successfully compete against established companies and new market entrants, as well as existing software tools; • successfully respond to other competitive challenges in the United States and globally; • attract, hire and retain highly skilled personnel; • the impact of any future pandemic, epidemic or other public health crisis and the corresponding pace and rate of recovery on our business; • obtain, expand, maintain, enforce and protect our intellectual property portfolio; • operate as a public company; • grow our member and customer base in new countries and/or markets, and increase awareness of our brand on a global basis; and • obtain and maintain compliance and licenses material to our current and future businesses, and comply with existing and new applicable laws and regulations including in markets outside of the United States.
We increased our subscription prices in 2020, and although the increased prices have not substantially affected our business to date, we cannot guarantee any future price increases we choose to implement will not adversely affect our business.
For example, in 2021 we released the first version of an open-source financial group chat optimized for financial conversations, designed to be used both in and outside of work, and maintained by a community of open source developers.
The current version has a subset of the features of our legacy app available as we continue development.
We expect our open-source offering to be a complete rewrite of the Expensify front end, built on a new React Native platform that uses the same codebase across iOS, Android, web and desktop once completed.
Although we see this direction as a natural next step in our long-term product vision, we have not developed an open-source financial group chat (or similar feature) before, and it may not meet customer needs, gain member traction or generate revenue sufficient to offset the costs of development, which could harm our business even if and when the feature complete version is released.
As of December 31, 2024, businesses with fewer than 1,000 employees accounted for approximately 95% of our customers by revenue, and we focus our product, marketing and sales efforts on these businesses, including SMBs.
Responding to such conflicting, complex or changing rules and regulations entails inherent costs, and any actual or perceived failure to comply with existing or new laws and regulations, or orders of any governmental authority, including changes to or expansion of their interpretations, may subject us to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets, enforcement actions in one or more jurisdictions, result in additional compliance and licensure requirements, and increased regulatory scrutiny of our business.
Expensify Payments LLC (“Expensify Payments”) is a licensed money transmitter (or its equivalent) in various U.S. states and territories and is in the process of obtaining money transmission licenses in a number of additional states and territories.
The loss of one or more of our executive officers or key employees could have a serious adverse effect on our business.
On February 25, 2025, the Executive Committee authorized a share repurchase program to repurchase up to $50 million of our outstanding Class A common stock, which replaces the Company's share repurchase program that was approved in 2022.
For our Legacy Card Program, launched in 2020, we rely on a single third-party vendor, Marqeta, for the Expensify Card, who also manages the relationship with the card's issuing bank, Sutton Bank, and the card network, Visa.
In the annual periods ended December 31, 2024, 2023 and 2022, consideration from this vendor representing monetized Expensify Card activities reduced our cost of revenue by $7.2 million, $10.1 million, and $6.2 million, respectively.
Under our Updated Card Program, which launched in February 2024, we rely on Marqeta as the payment processor, Bancorp as the card’s issuing bank, and Visa as the card network.
In the annual period ended December 31, 2024, interchange revenue earned under the Updated Card Program was $9.2 million.
If we or our third party providers fail to protect our IT Systems against security incidents, or otherwise to protect our Confidential Information, there may be damage to our reputation and brand, material financial penalties, and legal liability, which could substantially harm our business, financial condition, and results of operations.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
Additionally, many of our employees and service providers work remotely, in part due to a significant increase in remote work stemming from the COVID-19 pandemic that has been maintained.
As a result, we may be more vulnerable to cybersecurity-related events such as phishing attacks and other security challenges.
Any adverse impact to the availability, integrity, or confidentiality of our IT Systems or Confidential Information can result in intentional or accidental unauthorized access to our IT Systems or our customers’ or partners’ sites, networks, systems and accounts; unauthorized access to, and misappropriation or disclosure of Confidential Information; viruses, worms, spyware, ransomware, or other malware being served from our platform, mobile application, networks, or systems, including as a result of supply chain attacks; deletion or modification of content or the display of unauthorized content on our platform; interruption, disruption, or malfunction of operations; costs relating to remediation, deployment of additional personnel and protection technologies, and response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or risk of loss, litigation, regulatory action and other potential liabilities.
For example, in 2023 we opened the Expensify Lounge in San Francisco, CA as a brand awareness campaign, but it ultimately did not yield the expected results and was shut down in late 2023.
Further, in 2023 we hosted our third ExpensiCon, an invite-only, all-expenses paid industry conference set in an exotic location that included a full itinerary of events and excursions.
We spent significant resources on ExpensiCon and achieved mixed results.
There can be no assurance that similar initiatives will achieve desired results.
We expect our open-source offering to be a complete rewrite of the Expensify front end, built on a new React Native platform that uses the same codebase across iOS, Android, web and desktop once it is completed.
There can be no assurance that this direction will achieve customer acceptance or that we will realize the anticipated return on our investment even if and when the feature complete version is released.
For example we use AI Technologies to optimize our internal processes, including analyzing and processing receipts, responding to customer support requests, and drafting personalized marketing communications.
In particular, if the models underlying our AI Technologies are: incorrectly implemented; reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data; used without sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.
We use AI Technologies licensed from third parties, such as OpenAI, in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to OpenAI’s software and infrastructure.
Additionally, our reliance on third-party AI Technologies, such as those licensed from OpenAI, involves certain data privacy and security risks.
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.
Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI Technologies, or could be rescinded or amended as new administrations take differing approaches to evolving AI Technologies.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet completely determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies have been enacted in China and either entered into force in the United States and the EU in 2024 or are expected to enter into force in 2025.
Additionally, In the United States, the Trump administration has rescinded an executive order relating to the safe and secure development of AI Technologies that was previously implemented by the Biden administration.
The Trump administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded Biden executive order.
Thus, the Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies, or may implement new executive orders and/or other rule making relating to AI Technologies in the future.
Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive.
U.S. legislation related to AI Technologies has also been introduced at the federal level and is advancing at the state level.

and 54 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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