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What changed in Expensify, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Expensify, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+354 added−388 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Expensify, Inc.'s 2025 10-K

354 paragraphs added · 388 removed · 302 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+4 added−8 removed114 unchanged
Biggest changeFor more information on the potential impacts of government regulations affecting our business, see “Risk Factors—Risks Related to Our Business.” Corporate Information We were incorporated on April 29, 2009 as Expensify, Inc., a Delaware corporation. Our principal executive offices are located at 401 SW 5th Street, Portland, Oregon 97204. Available Information Our website address is www.expensify.com.
Biggest changeCorporate Information We were incorporated on April 29, 2009 as Expensify, Inc., a Delaware corporation. Our principal executive offices are located at 88 Kearny St, Ste 1600, San Francisco, California 94108. Available Information Our website address is www.expensify.com. Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K.
Unlike large enterprises, which often require multiple, customized point solutions for specialized business processes, SMBs prefer a single, comprehensive platform from one provider that can solve multiple pain points. • Easy to use. Many SMBs prioritize ease of use and convenience over cost and seek solutions with elegant, intuitive user experiences that require no training or expertise to operate.
Unlike large enterprises, which often prefer multiple, customized point solutions for specialized business processes, SMBs prefer a single, comprehensive platform from one provider that can solve multiple pain points. • Easy to use. Many SMBs prioritize ease of use and convenience over cost and seek solutions with elegant, intuitive user experiences that require no training or expertise to operate.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website, investors.expensify.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are also available free of charge on our investor relations website, www.investors.expensify.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We believe the principal competitive factors that drive leadership in the markets we compete in include the following: • End user design focus; • Ease of access, adoption, deployment and use; • Platform functionality and ability to automate processes; • Mobile access across devices; • Ability to purchase without a sales representative; • Viral, bottom-up business model supported by word-of-mouth adoption; • High interoperability with internal and third party systems and consumer applications; 17 Table of Contents • Flexible, employee-centric legal terms regarding data ownership; • Data security and privacy; • Speed and scalability of architecture underlying the platform; • Brand reputation and market consensus around platform superiority; and • Customer service and support.
We believe the principal competitive factors that drive leadership in the markets we compete in include the following: • End user design focus; • Ease of access, adoption, deployment and use; • Platform functionality and ability to automate processes; • Mobile access across devices; • Ability to purchase without a sales representative; • Viral, bottom-up business model supported by word-of-mouth adoption; • High interoperability with internal and third party systems and consumer applications; 18 Table of Contents • Flexible, employee-centric legal terms regarding data ownership; • Data security and privacy; • Speed and scalability of architecture underlying the platform; • Brand reputation and market consensus around platform superiority; and • Customer service and support.
We make our platform available for free trial online, which facilitates rapid and widespread adoption. The strength of our solution and its user-friendly nature creates advocates of our platform and allows 16 Table of Contents Expensify to spread virally, through word-of-mouth, across teams, departments and organizations. This word-of-mouth marketing increases organically as more individual members and teams discover our platform.
We make our platform available for free trial online, which facilitates rapid and widespread adoption. The strength of our solution and its user-friendly nature creates advocates of our platform and allows 17 Table of Contents Expensify to spread virally, through word-of-mouth, across teams, departments and organizations. This word-of-mouth marketing increases organically as more individual members and teams discover our platform.
Bills sent to a company’s @expensify.cash address are automatically SmartScanned, which captures key details for easy review and processing. • Real-time communication. Customers can leave comments or ask questions on the invoice and both parties can chat in real time directly in Expensify, or receive an email instantly. 13 Table of Contents • Extensive integrations.
Bills sent to a company’s @expensify.cash address are automatically SmartScanned, which captures key details for easy review and processing. 14 Table of Contents • Real-time communication. Customers can leave comments or ask questions on the invoice and both parties can chat in real time directly in Expensify, or receive an email instantly. • Extensive integrations.
Our usage within an organization expands further as the company adds members and adopts new features such as the Expensify Visa® Commercial Card ("Expensify Card"), Expensify Travel or Bill Pay. We offer simple, transparent and flexible subscription plans for both individuals and businesses that are completely self-service and payable by credit card.
Our usage within an organization expands further as the company adds members and adopts new features such as the Expensify Visa® Commercial Card (“Expensify Card”), Expensify Travel or Bill Pay. We offer simple, transparent and flexible subscription plans for both individuals and businesses that are completely self-service and payable by credit card.
None of our employees are represented by a labor union or covered by collective bargaining agreements. 15 Table of Contents We also engage third-party vendors to supply on-demand workers as needed to support our operations. We have not experienced any work stoppages, and we believe that our employee relations are strong.
None of our employees are represented by a labor union or covered by collective bargaining agreements. 16 Table of Contents We also engage third-party vendors to supply on-demand workers as needed to support our operations. We have not experienced any work stoppages, and we believe that our employee relations are strong.
We provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, on our investor relations website. The contents of these websites are not intended to be incorporated by reference into this report or in any other report or document we file. 19 Table of Contents
We provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, on our investor relations website. The contents of these websites are not intended to be incorporated by reference into this report or in any other report or document we file. 20 Table of Contents
We leverage a variety of targeted marketing strategies that involve industry conferences, industry influencers, partner marketing, our own conference and more with the goal of achieving market consensus that Expensify is the premier, industry standard expense management platform. This is essential to our viral and word-of-mouth business model.
We leverage a variety of targeted marketing strategies that involve industry conferences, industry influencers, partner marketing and more with the goal of achieving market consensus that Expensify is the premier, industry standard expense management platform. This is essential to our viral and word-of-mouth business model.
We believe our company code of ethics and conduct demonstrates our culture and values, including our adherence to Environmental, Social, and Governance ("ESG") principles; • Continue to strengthen our market consensus. We have worked hard to establish and maintain Expensify as a dominant expense management platform for SMBs.
We believe our company code of ethics and conduct demonstrates our culture and values, including our adherence to Environmental, Social, and Governance (“ESG”) principles; • Continue to strengthen our market consensus. We have worked hard to establish and maintain Expensify as a dominant expense management platform for SMBs.
Our AI-driven, mobile-first, cloud-based platform offers a best-in-class experience for companies looking to modernize their financial processes away from paper and excel spreadsheets for the first time. We define preaccounting as the systemized set of processes through which employees, or non-accountants, gather, code, aggregate and normalize financial data.
Our AI-driven, mobile-first, cloud-based platform offers a best-in-class experience for companies looking to modernize their financial processes away from paper and excel spreadsheets for the first time. 11 Table of Contents We define preaccounting as the systemized set of processes through which employees, or non-accountants, gather, code, aggregate and normalize financial data.
Every receipt we process through our OCR technology makes our SmartScan technology more accurate, every transaction we process and backtest enhances our fraud protection capabilities and every customer inquiry we resolve 14 Table of Contents allows Concierge to answer future questions faster.
Every receipt we process 15 Table of Contents through our OCR technology makes our SmartScan technology more accurate, every transaction we process and backtest enhances our fraud protection capabilities and every customer inquiry we resolve allows Concierge to answer future questions faster.
This enables us to focus our time and resources on making our features better for our members, and avoid the reliance on a costly, traditional top-down sales and marketing approach to attract and retain customers. • Word-of-mouth adoption supported by a market consensus approach. We believe that our happy members are the best form of marketing.
This enables us to focus our time and resources on making our features better for our members, and avoid the reliance on a costly, traditional top-down sales and marketing approach to attract and retain customers. 7 Table of Contents • Word-of-mouth adoption supported by a market consensus approach. We believe that our happy members are the best form of marketing.
Small and medium-sized businesses (“SMBs”) are the cornerstone of the global economy, making up almost all businesses and the majority of employment in Organisation for Economic Co-operation and Development ("OECD") member countries.
Small and medium-sized businesses (“SMBs”) are the cornerstone of the global economy, making up almost all businesses and the majority of employment in Organisation for Economic Co-operation and Development (“OECD”) member countries.
We believe that our data asset will continue to expand the value of our platform and drive future growth. Our Culture, Employees and Human Capital At Expensify, our culture is deeply embedded in everything we do. We strive to create a diverse, inclusive and collaborative workplace that prioritizes and fosters the long-term happiness of our employees.
We believe that our data asset will continue to expand the value of our platform and drive future growth. Our Culture, Employees and Human Capital At Expensify, our culture is deeply embedded in everything we do. We strive to create an inclusive and collaborative workplace that prioritizes and fosters the long-term happiness of our employees.
These features will enable easy financial collaboration within communities and between friends and family; • Build viral loops into our member experience that increase adoption by new customers. We design our expense management platform and every new feature with the aim of frictionless adoption.
These features will enable easy financial collaboration within communities and between friends and family; 10 Table of Contents • Build viral loops into our member experience that increase adoption by new customers. We design our expense management platform and every new feature with the aim of frictionless adoption.
The efficiency of our 5 Table of Contents business model allows us to prioritize attracting, retaining and inspiring talented, ambitious and humble people committed to a long-term vision.
The efficiency of our 6 Table of Contents business model allows us to prioritize attracting, retaining and inspiring talented, ambitious and humble people committed to a long-term vision.
All customer inquiries are screened to see if they can be answered from our help documentation. If they can be, Concierge will automatically respond with an answer formulated by generative AI using the help documentation as its source. Approximately 80% of initial inquiries are able to be answered automatically by Concierge without escalation.
All customer inquiries are screened to see if they can be answered from our help documentation. If they can be, Concierge will automatically respond with an answer formulated by generative AI using the help documentation as its source. The majority of initial inquiries are able to be answered automatically by Concierge without escalation.
We believe that always having the pain points of our members at the center of every technology decision and feature we develop enables us to consistently deliver an improved experience for every employee in an organization. • One platform, many features.
We believe that always having the pain points of our members at the center of every technology decision and feature we develop enables us to consistently deliver an improved experience for every employee in an organization. 8 Table of Contents • One platform, many features.
Expensify connects directly with the top banks in the U.S., as well as leading HR, practice management, tax reclamation, recruiting and travel management systems. A self-service API is available to anyone who wants to integrate Expensify into their technology ecosystem on their own without additional cost. • Comprehensive visibility.
Expensify connects directly with the top banks in the U.S., as well as leading HR, practice management, tax reclamation, recruiting and travel management systems. A self-service API is available to anyone who wants to integrate Expensify into their technology ecosystem on their own without additional cost. 12 Table of Contents • Comprehensive visibility.
Whether companies require visibility into transaction approvals, help with corporate credit card reconciliation and remittance, or insights into travel spend, financial data is visible throughout the platform. 11 Table of Contents PAY After capturing and approving relevant company spend, businesses require an easy and fast method for disbursing funds to employees and vendors.
Whether companies require visibility into transaction approvals, help with corporate credit card reconciliation and remittance, or insights into travel spend, financial data is visible throughout the platform. PAY After capturing and approving relevant company spend, businesses require an easy and fast method for disbursing funds to employees and vendors.
Our Compliance and Data Security We are PCI-DSS Level 1, SOC1 Type II, and SOC2 Type II compliant, with external parties performing "grey box" testing. We are integrated with most major banks in the United States, and we process billions of dollars in expense reimbursements every year and are audited periodically by our processing bank.
Our Compliance and Data Security We are PCI-DSS Level 1, SOC1 Type II, and SOC2 Type II compliant, with external parties performing “grey box” testing. We are integrated with most major banks in the United States, and we process billions of dollars in expense reimbursements every year and are audited periodically by our processing bank.
Since our founding in 2008, we have added over 15 million members to our community, and processed and automated over 1.7 billion expense transactions on our platform as of December 31, 2024, freeing people to spend less time managing expenses and more time doing the things they love.
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.
Companies control the maximum exposure they will accept for each employee by stipulating their individual unapproved spend, which is another cash control feature. If a cardholder fails to submit their expenses in a timely fashion, card activity is suspended until historical card spend is approved. • Cashback.
Companies control the maximum exposure they will accept for each employee by stipulating their individual unapproved spend, which is another cash control feature. If a cardholder fails to submit their expenses in a timely fashion, card activity is suspended until historical card spend is approved. 13 Table of Contents • Cashback.
We take privacy and data security seriously and design our systems and processes based on applicable domestic and international data privacy regulations, which sometimes change faster than the wind. Our Data As of December 31, 2024, we have processed over 1.7 billion expense transactions for our customers.
We take privacy and data security seriously and design our systems and processes based on applicable domestic and international data privacy regulations, which sometimes change faster than the wind. Our Data As of December 31, 2025, we have processed over 1.8 billion expense transactions for our customers.
When an expense report is submitted, the manager who receives it also automatically becomes a member. Concierge, our proprietary AI-powered customer support engine, helps new members set up an account, connect teammates, assign company policies and immediately sync Expensify with existing accounting, HR and travel systems.
When an expense report is submitted, the manager who receives it also automatically becomes a member. Concierge, our proprietary customer support engine powered by artificial intelligence (“AI”), helps new members set up an account, connect teammates, assign company policies and immediately sync Expensify with existing accounting, HR and travel systems.
These “Offshore” trips are productivity powerhouses that have resulted in some of our most impressive platform developments to date. • Save The World. We like the phrasing of this goal precisely because it is bombastic. We want to play an active role in unwinding the systemic bias that has prevented so many from living rich.
These trips are productivity powerhouses that have resulted in some of our most impressive platform developments to date. • Save The World. We like the phrasing of this goal precisely because it is bombastic. We want to play an active role in unwinding the issues that have prevented so many from living rich.
We believe that our unique culture and our employees’ happiness and long-term commitment to Expensify is a critical component of our success. As of December 31, 2024 we had 115 full-time employees.
We believe that our unique culture and our employees’ happiness and long-term commitment to Expensify is a critical component of our success. As of December 31, 2025 we had 117 full-time employees.
Companies with settled spend in the United States ("U.S.") over $250,000 per month on their Expensify Cards under the Updated Card Program (defined below) receive 2% cashback for all U.S. purchases or 1% for all U.S. purchases if monthly settled spend in the U.S. is under $250,000. 12 Table of Contents • Daily settlement option .
Our standard cashback terms dictate that companies with settled spend in the United States (“U.S.”) over $250,000 per month on their Expensify Cards under the Updated Card Program (defined below) receive 2% cashback for all U.S. purchases or 1% for all U.S. purchases if monthly settled spend in the U.S. is under $250,000. • Daily settlement option .
For the quarter ended December 31, 2024, an average of 687,000 paid members across an average of 47,600 companies and over 200 countries and territories used Expensify to make money easy.
For the quarter 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 comprehensive financial platform offers a wide range of easy-to-use but powerful features that automate the preaccounting processes for businesses of all sizes – including managing expenses, capturing and managing spend via the Expensify Card and more recently, paying bills and sending invoices, all included in the Expensify platform. 10 Table of Contents Expense Management Expenses are among the most complicated preaccounting workflow, no matter the size of a company.
Our comprehensive financial platform offers a wide range of easy-to-use but powerful features that automate the preaccounting processes for businesses of all sizes – including managing expenses, capturing and managing spend via the Expensify Card and more recently, paying bills and sending invoices, all included in the Expensify platform.
For additional information about our intellectual property and associated risks, see the section titled “Risk Factors—Risks Related to Our Business.” 18 Table of Contents Government Regulation Our business activities are subject to various federal, state, local and foreign laws, rules and regulations.
For additional information about our intellectual property and associated risks, see Part I, Item 1A “Risk Factors". 19 Table of Contents Government Regulation Our business activities are subject to various federal, state, local and foreign laws, rules and regulations.
Collect and Control customers can access additional discounts if they spend on the Expensify Card: • Paid Plans ◦ Collect. Our Collect plan enables our members to integrate with popular small business accounting systems, configure simple expense report approval workflows, as well as pay employees, contractors and volunteers via Direct Deposit ACH or internationally via Global Reimbursements. ◦ Control.
Our Collect plan enables our members to integrate with popular small business accounting systems, configure simple expense report approval workflows, as well as pay employees, contractors and volunteers via Direct Deposit ACH or internationally via Global Reimbursements. ◦ Control.
Expenses touch every employee, span every layer of the organization and require interaction with a host of internal and external business systems. While the expense management process is incredibly complex, it largely occurs in three distinct, sequential phases: Capture > Approve > Pay. CAPTURE Most of today’s financial data still exists on paper.
Expense Management Expenses are among the most complicated preaccounting workflow, no matter the size of a company. Expenses touch every employee, span every layer of the organization and require interaction with a host of internal and external business systems. While the expense management process is incredibly complex, it largely occurs in three distinct, sequential phases: Capture > Approve > Pay.
By consistently acting on and vocally promoting our values, we have the ability to both drive positive change and create brand awareness that can add to the virality of our platform.
We believe that consumers are more likely to both use and recommend products from brands they admire. By consistently acting on and vocally promoting our values, we have the ability to both drive positive change and create brand awareness that can add to the virality of our platform.
As of December 31, 2024, we had 16 trademark registrations in the United States, including EXPENSIFY, EXPENSICON, PERSONAL KARMA, EXPENSIFY THIS, SMARTSCAN, CONCEIRGE, CORPORATE KARMA, YOU WEREN’T BORN TO DO EXPENSES, LAT* TALKS, LAT TALKS, SWIPE TO WIN, and LONG ASS TABLE TALKS.
As of December 31, 2025, we had 22 trademark registrations in the United States, covering EXPENSIFY, Expensify “E” Logo, EXPENSIFY THIS, EXPENSIFY PAYMENTS, YOU WEREN’T BORN TO DO EXPENSES, SMARTSCAN CONCIERGE, SWIPE TO WIN, EASY MONEY, EXPENSIFY IS EASY MONEY, LAT TALKS, LAT* TALKS, LONG ASS TABLE TALKS, EXPENSICON, KARMA POINTS, CORPORATE KARMA, and PERSONAL KARMA.
Receipts and emails are automatically matched to incoming credit card transactions in real-time, preventing duplicates and reducing the need to manually reconcile credit card statements at month end. • Mobile expense capture.
SmartScan optimizes for high-accuracy data extraction to support our “fire and forget” receipt capture. • Credit card matching. Receipts and emails are automatically matched to incoming credit card transactions in real-time, preventing duplicates and reducing the need to manually reconcile credit card statements at month end. • Mobile expense capture.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, business acquisitions, consumer and data protection and taxes, could have a material impact on our business in subsequent periods.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, business acquisitions, consumer and data protection and taxes, could have a material impact on our business in subsequent periods. For more information on the potential impacts of government regulations affecting our business, see Part I, Item 1A “Risk Factors".
Anyone can easily download our mobile application or go to our website to sign up for free on their own, and later upgrade to a paid subscription for advanced features.
Our Business Model Our platform strategy enables a viral bottom-up business model that is capital efficient and extremely scalable. Anyone can easily download our mobile application or go to our website to sign up for free on their own, and later upgrade to a paid subscription for advanced features.
Our free Track plan comes with our SmartScan receipt scanning functionality and is used primarily by individuals and sole proprietors to streamline their receipt and mileage tracking. ◦ Submit. Our free Submit plan includes the same functionality in Track , and also adds the ability to automatically submit expense reports to anyone for reimbursement.
Our free Track plan comes with our SmartScan receipt scanning functionality and is used primarily by individuals and sole proprietors to streamline their receipt and mileage tracking. ◦ Submit.
We also own several domain names, including www.expensify.com, use.expensiffy.com, www.expensify.org, and new.expensify.com. As of December 31, 2024, we had 26 issued patents and 12 pending patent applications in the United States. Our issued patents expire between August 18, 2028 and March 26, 2040.
We will pursue additional trademark registrations to the extent we believe it would be beneficial and cost effective. We also own several domain names, including www.expensify.com, use.expensiffy.com, www.expensify.org, and new.expensify.com. As of December 31, 2025, we had 31 issued patents and 12 pending patent applications in the United States. Our issued patents expire between August 2028 and September 2042.
We continue to focus on maintaining and extending the virality of our features to support our viral, bottom-up business model; 9 Table of Contents • Expand and monetize transaction volume from existing and new customers.
We continue to focus on maintaining and extending the virality of our features to support our viral, bottom-up business model; • Expand and monetize transaction volume from existing and new customers. We intend to continue to increase the promotion of the Expensify Card to both new and existing customers to drive growth in adoption; • Promote Expensify’s culture and values.
Expensify streamlines the capture and normalization of disparate financial data in the following ways: • SmartScan. Snap a photo of your receipt, forward receipts from email, or upload attachments directly in the application. SmartScan optimizes for high-accuracy data extraction to support our “fire and forget” receipt capture. • Credit card matching.
CAPTURE Most of today’s financial data still exists on paper. Expensify streamlines the capture and normalization of disparate financial data in the following ways: • SmartScan. Snap a photo of your receipt, forward receipts from email, or upload attachments directly in the application.
This means we want to have ample means, and the time to enjoy it. We want to participate in a diverse, equitable, inclusive and fundamentally just society — both inside and outside our own walls.
We want to participate in a fundamentally just society — both inside and outside our own walls.
We deploy large scale brand advertising to build on this platform superiority and help create market consensus that Expensify is the category leader for expense management software.
We strive to build a superior platform that makes the lives of employees and admins easier so that they become our champions and promote us to other individuals and organizations. We deploy large scale brand advertising to build on this platform superiority and help create market consensus that Expensify is the category leader for expense management software.
Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K. The U.S. Securities and Exchange Commission (“SEC”) maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
The U.S. Securities and Exchange Commission (“SEC”) maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
We operate with a flat, generalist organizational structure, where everybody is encouraged to participate in the discussions and contribute to the decisions they choose to. Our culture is centered on the belief that a life well lived is one that enables you to achieve the following three goals, which we all work towards with a long-term mindset: • Live Rich.
Our culture is centered on the belief that a life well lived is one that enables you to achieve the following three goals, which we all work towards with a long-term mindset: • Live Rich. This means we want to have ample means, and the time to enjoy it.
Our business subscriptions can be used by teams, organizations, and companies on one of our paid plans, which include our Collect and Control plans, following a free trial. We bill customers on Collect and Control plans at the start of each month based on the number of policy members who were active in the previous month.
We bill customers on Collect and Control plans at the start of each month based on the number of policy members who were active in the previous month.
Each customer has either a "pay per use" plan in which they are billed a flat rate for each active member, or an "annual" plan where they commit to a minimum number of monthly seats in 8 Table of Contents exchange for a discount.
Each customer has either a “pay per use” plan in which they are billed a flat rate for each active member, or an “annual” plan where they commit to a minimum number of monthly seats in exchange for a discount. Collect and Control customers can access additional discounts if they spend on the Expensify Card: • Paid Plans ◦ Collect.
We develop our features in a compounding manner, which means that everything we build 7 Table of Contents improves everything we've already built, and lays a foundation for what we will build next.
We develop our features in a compounding manner, which means that everything we build improves everything we've already built, and lays a foundation for what we will build next. This enables increasingly rapid deployment of new features that solve other problems for our members and allows us to extend the network effect of our platform. • Highly integrated.
We offer over 50 pre-built integrations, allowing Expensify to seamlessly connect with accounting and HR systems, travel management software, business and employee bank accounts and credit cards. These integrations enable our members to synchronize data in real-time across their technology ecosystem and automate expense management with the applications and tools they use every day.
We designed our platform to easily integrate with other business and consumer applications. We offer over 50 pre-built integrations, allowing Expensify to seamlessly connect with accounting and HR systems, travel management software, business and employee bank accounts and credit cards.
Success Coaches are full-time employees who manage the bulk of our product management. Approximately 25% of Success Coach time is spent on traditional product management activity (i.e., writing product proposals, engaging with the product development team, testing new functionality, updating documentation).
The remainder of Success Coach time is spent on traditional product management activity (i.e., writing product proposals, engaging with the product development team, testing new functionality, updating documentation). We believe that by keeping our product managers involved with the customers we design and develop features that customers like to use — supporting our product-led growth.
In October 2023, the Company amended the Expensify Card program (“Updated Card Program”) to separately enter into an agreement with a new issuing bank, The Bancorp Bank, N.A. ("Bancorp"), to issue Expensify Cards to customers and authorize and settle transactions on the Visa card network, in providing overall card program management services.
Substantially all Expensify Card cardholders as of December 31, 2025 are under our updated program (the “Updated Card Program”), which launched in February 2024. 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.
Not too often, but often enough to remind ourselves that we are living life to its fullest, and enabling others to do the same.
Not too often, but often enough to remind ourselves that we are living life to its fullest, and enabling others to do the same. For example, we aim to bring the whole company to U.S. and international locations from time to time to collaborate in person, build friendships with their colleagues, broaden their perspective and have a great time.
We believe that elements of our platform strategy are a critical driver of the viral, widespread adoption of Expensify across and between any type of organization. Our Business Model Our platform strategy enables a viral bottom-up business model that is capital efficient and extremely scalable.
These integrations enable our members to synchronize data in real-time across their technology ecosystem and automate expense management with the applications and tools they use every day. We believe that elements of our platform strategy are a critical driver of the viral, widespread adoption of Expensify across and between any type of organization.
The remaining approximately 75% is spent doing traditional account management tasks and performing "supervised training" of the Concierge AI in response to edge case conversations escalated from Second Responders. We believe that by keeping our product managers involved with the customers we design and develop features that customers like to use — supporting our product-led growth.
Success Coaches are full-time employees who primarily serve in both account management and product management roles. The majority of Success Coach time is spent doing traditional account management tasks and performing “supervised training” of the Concierge AI in response to edge case conversations escalated from Second Responders.
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We strive to build a superior platform that makes the lives of 6 Table of Contents employees and admins easier so that they become our champions and promote us to other individuals and organizations.
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Our free Submit plan includes the same functionality in Track , and also adds the ability to automatically submit expense reports to anyone for reimbursement. 9 Table of Contents Our business subscriptions can be used by teams, organizations, and companies on one of our paid plans, which include our Collect and Control plans, following a free trial.
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This enables increasingly rapid deployment of new features that solve other problems for our members and allows us to extend the network effect of our platform. • Highly integrated. We designed our platform to easily integrate with other business and consumer applications.
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An immaterial number of cardholders continue to operate within our previous card program, which operates pursuant to an agreement with the payment processor Marqeta, Inc. See Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” for additional details on revenue and expense impacts from the Expensify Card program transition.
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We intend to continue to increase the promotion of the Expensify Card to both new and existing customers to drive growth in adoption; • Promote Expensify’s culture and values. We believe that consumers are more likely to both use and recommend products from brands they admire.
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We operate with a relatively flat, generalist organizational structure, where everybody is encouraged to participate in the discussions and contribute to the decisions they choose to.
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Under the original Expensify Card program launched in 2020 (“Legacy Card Program”), Expensify has an agreement with the payment processor, Marqeta, Inc. ("Marqeta"), and relied on Marqeta to manage the relationship with the issuing bank, Sutton Bank, and the card network, Visa, in authorizing and settling transactions.
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AT THE SPEED OF CHAT and TRAVEL AND EXPENSE AT THE SPEED OF CHAT have been allowed, after examination by the United States Patent and Trademark Office. We also had approximately 135 trademark registrations (including international registrations) and approximately 8 pending applications in certain foreign jurisdictions, including Canada, Australia, New Zealand, Benelux, The Cayman islands and United Arab Emirates.
Removed
The Updated Card Program launched in February 2024 and all new Expensify Cards issued subsequent to the launch of the Updated Card Program operate under that program. As of December 31, 2024, our transition of cardholders from the Legacy Card Program to the Updated Card Program was substantially complete.
Removed
For example, we aim to bring the whole company, plus families and kids, to a warm and sunny international location every year for a month-long "working vacation" to enable our employees to collaborate in person from a remote beach, build friendships with their colleagues, broaden their perspective and have a great time.
Removed
Various other marks have also been published by us such as EXPENSIFY PAYMENTS, AT THE SPEED OF CHAT, TRAVEL AND EXPENSE AT THE SPEED OF CHAT, EASY MONEY, EXPENSIFY IS EASY MONEY, EXPENSIFY – IT’S EASY MONEY, NEW EXPENSIFY, KARMA POINTS and the Expensify “E” Logo.
Removed
We also had approximately 101 trademark registrations (including international registrations) and approximately 11 pending applications in certain foreign jurisdictions, including Canada, the European Union, the United Kingdom, Mexico, Brazil, Australia and New Zealand. We will pursue additional trademark registrations to the extent we believe it would be beneficial and cost effective.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

144 edited+21 added−41 removed446 unchanged
Biggest changeSignificant assumptions and estimates used in preparing our consolidated financial statements include those related to the useful lives and recoverability of long-lived assets, the fair value of common stock prior to being a publicly traded company and stock-based compensation expense, as well as those used to allocate our employee and employee related expense, which consist of contractor costs, employee salary and wages, stock-based compensation and travel and other employee-related costs, to their appropriate financial statement line items due to our generalist model and organizational structure.
Biggest changeSignificant assumptions and estimates used in preparing our consolidated financial statements include those related to the Company's classification of employee and employee-related expenses, the useful lives and recoverability of long-lived assets and deferred contract acquisition costs, income taxes, capitalization of internal-use software costs and stock-based compensation expense.
Governmental and regulatory bodies and authorities may also impose new or additional requirements on our business or issue or promulgate new laws, regulations, or rules applicable to persons engaged in money transmission that adversely affect our business, including those that: • prohibit, restrict, and/or impose taxes or fees on money transmission transactions in, to or from certain countries or with certain governments, individuals, or entities; • impose additional customer identification and customer due diligence requirements; 28 Table of Contents • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; • impose minimum capital or other financial requirements; • limit or restrict the revenue that may be generated from money transmission, including revenue from interest earned on customer funds, transaction fees, and revenue derived from foreign exchange; • require enhanced disclosures to our money transmission customers; • require the principal amount of money transmission originated in a country to be invested in that country or held in trust until paid; • limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; • restrict or limit our ability to process transactions using centralized databases, for example, by requiring that transactions be processed using a database maintained in a particular country or region; or • impose other requirements in furtherance of their missions.
Governmental and regulatory bodies and authorities may also impose new or additional requirements on our business or issue or promulgate new laws, regulations, or rules applicable to persons engaged in money transmission that adversely affect our business, including those that: • prohibit, restrict, and/or impose taxes or fees on money transmission transactions in, to or from certain countries or with certain governments, individuals, or entities; • impose additional customer identification and customer due diligence requirements; 29 Table of Contents • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; • impose minimum capital or other financial requirements; • limit or restrict the revenue that may be generated from money transmission, including revenue from interest earned on customer funds, transaction fees, and revenue derived from foreign exchange; • require enhanced disclosures to our money transmission customers; • require the principal amount of money transmission originated in a country to be invested in that country or held in trust until paid; • limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; • restrict or limit our ability to process transactions using centralized databases, for example, by requiring that transactions be processed using a database maintained in a particular country or region; or • impose other requirements in furtherance of their missions.
The market price of our Class A common stock has been and may continue to be volatile and could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K, and others beyond our control, including: • actual or anticipated fluctuations in our results of operations; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the financial projections we provide to the public, our failure to meet these projections or our failure to provide such projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors; • any major change in our Board of Directors, management, or key personnel; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • the economy as a whole in the United States and internationally, and market conditions in our industry; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations, or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; • the legal and regulatory landscape and changes in the application of existing laws or adoption of new laws that impact our business; • legal and regulatory claims, litigation, or pre-litigation disputes and other proceedings; • the economic, political, and social impact of, and uncertainty relating to, the outbreaks of pandemics, epidemics and other contagious diseases; • changes in our capital structure; • other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and • sales or expected sales of our Class A common stock by us, our officers, directors, principal stockholders and employees.
The market price of our Class A common stock has been and may continue to be volatile and could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K, and others beyond our control, including: • actual or anticipated fluctuations in our results of operations; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the financial projections we provide to the public, our failure to meet these projections or our failure to provide such projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors; • any major change in our Board of Directors, management, or key personnel; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • the economy as a whole in the United States and internationally, and market conditions in our industry; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations, or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; • the legal and regulatory landscape and changes in the application of existing laws or adoption of new laws that impact our business; 62 Table of Contents • legal and regulatory claims, litigation, or pre-litigation disputes and other proceedings; • the economic, political, and social impact of, and uncertainty relating to, the outbreaks of pandemics, epidemics and other contagious diseases; • changes in our capital structure; • other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and • sales or expected sales of our Class A common stock by us, our officers, directors, principal stockholders and employees.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Stock Market LLC ("Nasdaq"). Pursuant to Sections 302 and 404 of the Sarbanes-Oxley Act, our independent registered public accounting firm has provided an attestation report regarding our internal control over financial reporting.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Stock Market LLC (“Nasdaq”). Pursuant to Sections 302 and 404 of the Sarbanes-Oxley Act, our independent registered public accounting firm has provided an attestation report regarding our internal control over financial reporting.
All decisions with respect to the voting (but not the disposition) of shares held in the Voting Trust from time to time will be made by the trustees of the Voting Trust ("Trustees") in their sole and absolute discretion, and with no responsibility under the Voting Trust Agreement as stockholder, trustee or otherwise, except for his or her own individual malfeasance.
All decisions with respect to the voting (but not the disposition) of shares held in the Voting Trust from time to time will be made by the trustees of the Voting Trust (“Trustees”) in their sole and absolute discretion, and with no responsibility under the Voting Trust Agreement as stockholder, trustee or otherwise, except for his or her own individual malfeasance.
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.
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 addition, the EU General Data Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the "GDPR") which impose stringent data protection requirements for processing the Personal Data of individuals.
In addition, the EU General Data Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the “GDPR”) which impose stringent data protection requirements for processing the Personal Data of individuals.
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.
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.
Any failure to provide timely and accurate financial reporting or to maintain effective disclosure controls and internal control over financial reporting could harm our business, results of operations and financial condition, and could cause investors to lose confidence in our financial reports and our financial reporting generally, which could cause a decline in the trading price of our Class A common stock. 29 Table of Contents We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
Any failure to provide timely and accurate financial reporting or to maintain effective disclosure controls and internal control over financial reporting could harm our business, results of operations and financial condition, and could cause investors to lose confidence in our financial reports and our financial reporting generally, which could cause a decline in the trading price of our Class A common stock. 30 Table of Contents We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs.
We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay any outstanding indebtedness at the time any such event of default occurs.
Our business will be harmed if any provider of such software systems: • discontinues or limits our access to its software or APIs; • modifies its terms of service or other policies, including fees charged to, or other restrictions on us, or other application developers; • changes how information is accessed by us or our customers; 46 Table of Contents • establishes more favorable relationships with one or more of our competitors; or • develops or otherwise favors its own competitive offerings over our platform.
Our business will be harmed if any provider of such software systems: • discontinues or limits our access to its software or APIs; • modifies its terms of service or other policies, including fees charged to, or other restrictions on us, or other application developers; • changes how information is accessed by us or our customers; 48 Table of Contents • establishes more favorable relationships with one or more of our competitors; or • develops or otherwise favors its own competitive offerings over our platform.
It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or 53 Table of Contents losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or 55 Table of Contents losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
On May 31, 2022 we received notice from the FEC clearing us of any wrongdoings in relation to these complaints. However, we cannot assure you that the matter will not result in further complaints, regulatory inquiries or future proceedings. See Part I, Item 3 "Legal Proceedings" for additional information regarding our legal proceedings.
On May 31, 2022 we received notice from the FEC clearing us of any wrongdoings in relation to these complaints. However, we cannot assure you that the matter will not result in further complaints, regulatory inquiries or future proceedings. See Part I, Item 3 “Legal Proceedings” for additional information regarding our legal proceedings.
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. These customers may be more susceptible to general economic conditions than larger businesses, which may have greater liquidity and access to capital.
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. These customers may be more susceptible to general economic conditions than larger businesses, which may have greater liquidity and access to capital.
There is increased scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other ESG matters. For example, there are inherent environmental risks wherever business is conducted, and climate change is expected to increase the frequency or severity of certain disasters or result in chronic changes that result in additional risks.
There is continued scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other ESG matters. For example, there are inherent environmental risks wherever business is conducted, and climate change is expected to increase the frequency or severity of certain disasters or result in chronic changes that result in additional risks.
Some of our larger competitors use broader product offerings to compete, including by selling at zero or 26 Table of Contents negative margins, by bundling their product, or by closing access to their technology platforms. Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features.
Some of our larger competitors use broader product offerings to compete, including by selling at zero or 27 Table of Contents negative margins, by bundling their product, or by closing access to their technology platforms. Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features.
Department of the Treasury, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, Office of Foreign Assets Control, self-regulatory 27 Table of Contents organizations, and numerous state and local governmental and regulatory authorities. These various authorities and governing bodies may enact conflicting laws or regulations that are complex and may change frequently.
Department of the Treasury, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, Office of Foreign Assets Control, self-regulatory 28 Table of Contents organizations, and numerous state and local governmental and regulatory authorities. These various authorities and governing bodies may enact conflicting laws or regulations that are complex and may change frequently.
Additionally, our reliance on third-party AI Technologies, such as those licensed from OpenAI, involves certain data privacy and security risks.
Additionally, our reliance on third-party AI Technologies, such as those licensed from OpenAI and Anthropic, involves certain data privacy and security risks.
Additionally, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our Class A common stock may be seriously harmed. The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Additionally, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our Class A common stock may be seriously harmed. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Any litigation may also involve non-practicing entities or other adverse patent owners that have no relevant solution revenue, and therefore, 48 Table of Contents our patent portfolio may provide little or no deterrence as we would not be able to assert our patents against such entities or individuals.
Any litigation may also involve non-practicing entities or other adverse patent owners that have no relevant solution revenue, and therefore, 50 Table of Contents our patent portfolio may provide little or no deterrence as we would not be able to assert our patents against such entities or individuals.
This could limit or delay our ability to offer new or competitive features and increase our costs. Any of the foregoing 52 Table of Contents would disrupt the distribution and sale of subscriptions to our platform and harm our business, results of operations and financial condition. Any litigation against us could be costly and time-consuming to defend.
This could limit or delay our ability to offer new or competitive features and increase our costs. Any of the foregoing 54 Table of Contents would disrupt the distribution and sale of subscriptions to our platform and harm our business, results of operations and financial condition. Any litigation against us could be costly and time-consuming to defend.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected. The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected. The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.
Foreign Corrupt Practices Act, U.S. bribery laws, the UK Bribery Act and similar laws and regulations in other jurisdictions; • increased financial accounting and reporting burdens and complexities; • declines in the values of foreign currencies relative to the U.S. dollar; • restrictions on the transfer of funds; • potentially adverse tax consequences; • the cost of and potential outcomes of any claims or litigation; • future accounting pronouncements and changes in accounting policies; 39 Table of Contents • changes in tax laws or tax regulations; • health or similar issues, such as a pandemic or epidemic; and • regional and local economic and political conditions.
Foreign Corrupt Practices Act, U.S. bribery laws, the UK Bribery Act and similar laws and regulations in other jurisdictions; • increased financial accounting and reporting burdens and complexities; • declines in the values of foreign currencies relative to the U.S. dollar; • restrictions on the transfer of funds; • potentially adverse tax consequences; • the cost of and potential outcomes of any claims or litigation; • future accounting pronouncements and changes in accounting policies; • changes in tax laws or tax regulations; • health or similar issues, such as a pandemic or epidemic; and • regional and local economic and political conditions.
In addition, if Internet service providers and other third parties providing Internet services, including incumbent phone companies, cable 45 Table of Contents companies and wireless companies, have outages or suffer deterioration in their quality of service, our customers may not have access to or may experience a decrease in the quality of our platform and features.
In addition, if Internet service 47 Table of Contents providers and other third parties providing Internet services, including incumbent phone companies, cable companies and wireless companies, have outages or suffer deterioration in their quality of service, our customers may not have access to or may experience a decrease in the quality of our platform and features.
For example, a search engine 47 Table of Contents may change its ranking algorithms, methodologies, or design layouts. As a result, links to our website may not be prominent enough to drive traffic to our website, and we may not know how or otherwise be in a position to influence the results.
For example, a search engine 49 Table of Contents may change its ranking algorithms, methodologies, or design layouts. As a result, links to our website may not be prominent enough to drive traffic to our website, and we may not know how or otherwise be in a position to influence the results.
The local, state, and federal laws, rules, regulations, licensing and other authorization schemes, and industry standards that govern our business, including our payment services, include, or may in the future include, those relating to banking, invoicing, cross-border and domestic money transmission, foreign exchange, payments services (such as payment processing and settlement services), anti-money laundering, combating terrorist financing, escheatment, U.S. and international sanctions regimes, and compliance with the Payment Card Industry Data Security Standard ("PCI-DSS"), a set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data.
The local, state, and federal laws, rules, regulations, licensing and other authorization schemes, and industry standards that govern our business, including our payment services, include, or may in the future include, those relating to banking, invoicing, cross-border and domestic money transmission, foreign exchange, payments services (such as payment processing and settlement services), anti-money laundering, combating terrorist financing, escheatment, U.S. and international sanctions regimes, and compliance with the Payment Card Industry Data Security Standard (“PCI-DSS”), a set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data.
For example, in November 2020, the Federal Election Commission ("FEC") notified us of a number of complaints filed against us in connection with David Barrett's email on October 23, 2020 urging customers to protect democracy. We responded to the complaints in November and December 2020, requesting dismissal of all complaints.
For example, in November 2020, the Federal Election Commission (“FEC”) notified us of a number of complaints filed against us in connection with David Barrett's email on October 23, 2020 urging customers to protect democracy. We responded to the complaints in November and December 2020, requesting dismissal of all complaints.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, 56 Table of Contents as provided in the section titled “Management’s discussion and analysis of financial condition and results of operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s discussion and analysis of financial condition and results of operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources.
Furthermore, the 49 Table of Contents steps we have taken and may take in the future may not prevent misappropriation of our proprietary features or technologies, particularly with respect to officers and employees who are no longer employed by us.
Furthermore, the 51 Table of Contents steps we have taken and may take in the future may not prevent misappropriation of our proprietary features or technologies, particularly with respect to officers and employees who are no longer employed by us.
In addition, to the extent any third-party AI Technologies are used as a hosted service, any disruption, outage, or loss of information through such 34 Table of Contents hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.
In addition, to the extent any third-party AI Technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.
For example, whenever a holder of LT10 or LT50 common stock desires to transfer or convert shares of his or her LT10 or LT50 common stock, our amended and restated certificate of incorporation and the Voting Trust Agreement contain certain provisions that require, subject to certain exceptions, the trustees of the Voting Trust to attempt to find a holder of shares of Class A common stock to exchange such shares for such shares of LT10 or LT50 common stock, and such shares of LT10 or LT50 common stock will only convert into shares of Class A common stock if no such Class A stockholder is identified.
For example, whenever a holder of LT10 or LT50 common stock desires to transfer or convert shares of his or her LT10 or LT50 common stock, our amended and restated certificate of incorporation and the Voting Trust Agreement contain certain provisions that require, subject to certain exceptions, the trustees of the Voting Trust to attempt to find a holder of shares of Class A common stock to exchange such shares for such shares of LT10 or LT50 61 Table of Contents common stock, and such shares of LT10 or LT50 common stock will only convert into shares of Class A common stock if no such Class A stockholder is identified.
The contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual 50 Table of Contents property rights.
The contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual 52 Table of Contents property rights.
Moreover, we believe that many of our new customers originate from word-of-mouth and other non-paid referrals from existing customers, so we must ensure that our existing customers remain loyal to our platform in order to continue receiving those referrals. Our business is subscription-based, and customers are not obligated to and may not renew their subscriptions after their existing subscriptions expire.
Moreover, we believe that many of our new customers originate from word-of-mouth and other non-paid referrals from existing customers, so we must ensure that our existing customers remain loyal to our platform in order to continue receiving those referrals. 25 Table of Contents Our business is subscription-based, and customers are not obligated to and may not renew their subscriptions after their existing subscriptions expire.
Moreover, if our operating results do not meet the expectations of the investor community, one or more of the analysts who cover our company may change their recommendations regarding our company, and our stock price could decline. 65 Table of Contents We are subject to various risks associated with climate change and other environmental, social, and governance matters.
Moreover, if our operating results do not meet the expectations of the investor community, one or more of the analysts who cover our company may change their recommendations regarding our company, and our stock price could decline. We are subject to various risks associated with climate change and other environmental, social, and governance matters.
Foreign Corrupt Practices Act of 1977 (“FCPA”) and the U.K. Bribery Act 2010 (“Bribery Act”), as well as the laws of the countries where we do business. These laws and regulations apply to companies, individual directors, officers, employees and 40 Table of Contents agents, and may restrict our operations, trade practices, investment decisions and partnering activities.
Foreign Corrupt Practices Act of 1977 (“FCPA”) and the U.K. Bribery Act 2010 (“Bribery Act”), as well as the laws of the countries where we do business. These laws and regulations apply to companies, individual directors, officers, employees and agents, and may restrict our operations, trade practices, investment decisions and partnering activities.
The expansion of our existing international operations and entry into additional international markets will require significant management attention and financial resources. Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. We may be adversely affected by global economic and political instability.
The expansion of our existing international operations and entry into additional international markets will 41 Table of Contents require significant management attention and financial resources. Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. We may be adversely affected by global economic and political instability.
All shares of LT10 and LT50 common stock are held directly by the Voting Trust established in connection with our initial public offering pursuant to a voting trust agreement ("Voting Trust Agreement").
All shares of LT10 and LT50 common stock are held directly by the Voting Trust established in connection with our initial public offering pursuant to a voting trust agreement (“Voting Trust Agreement”).
Customers may or may not renew their subscriptions as a result of a number of factors, including their satisfaction or dissatisfaction with our platform; changes we may implement in our pricing 24 Table of Contents or structure; the pricing or capabilities of the products and services offered by our competitors; the effects of general economic conditions; or customers’ budgetary constraints.
Customers may or may not renew their subscriptions as a result of a number of factors, including their satisfaction or dissatisfaction with our platform; changes we may implement in our pricing or structure; the pricing or capabilities of the products and services offered by our competitors; the effects of general economic conditions; or customers’ budgetary constraints.
CIBC could also exercise its rights as collateral agent to take possession of, and to dispose of, the collateral securing the loan, which collateral includes substantially all of our personal property (including intellectual property). Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.
CIBC could also exercise its rights as collateral agent to take possession of, and to dispose of, the collateral securing the letter of credit, which collateral includes substantially all of our personal property (including intellectual property). Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.
The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes by continually modifying and enhancing our features to keep pace with changes in hardware systems and software applications, database technology and evolving technical standards and interfaces on a timely basis.
The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes by continually modifying and enhancing our features to keep pace with changes in hardware systems and software applications, database technology 24 Table of Contents and evolving technical standards and interfaces on a timely basis.
We may be subject to 51 Table of Contents suits by parties claiming ownership of what we believe to be open source software, or claiming non-compliance with the applicable open source licensing terms.
We may be subject to 53 Table of Contents suits by parties claiming ownership of what we believe to be open source software, or claiming non-compliance with the applicable open source licensing terms.
If new technologies emerge that deliver competitive products at lower prices, more efficiently, more conveniently, or more securely, it could adversely impact our ability to compete. 23 Table of Contents Our platform must also integrate with a variety of network, hardware, mobile and software platforms and technologies.
If new technologies emerge that deliver competitive products at lower prices, more efficiently, more conveniently, or more securely, it could adversely impact our ability to compete. Our platform must also integrate with a variety of network, hardware, mobile and software platforms and technologies.
We also are subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and agents into contact with public officials responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.
We also are subject to the jurisdiction of various governments and regulatory agencies around the world, 42 Table of Contents which may bring our personnel and agents into contact with public officials responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.
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; 20 Table of Contents • 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.
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; 21 Table of Contents • 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.
In addition, in July 2017, S&P Dow Jones, another provider of widely followed stock indexes, stated that companies 60 Table of Contents with multiple share classes will not be eligible for certain of their indexes. As a result, our Class A common stock will likely not be eligible for these stock indexes.
In addition, in July 2017, S&P Dow Jones, another provider of widely followed stock indexes, stated that companies with multiple share classes will not be eligible for certain of their indexes. As a result, our Class A common stock will likely not be eligible for these stock indexes.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds 64 Table of Contents favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
As a result, our governance structure and the Voting Trust may have the effect of depriving our stockholders of an 59 Table of Contents opportunity to sell their shares at a premium over prevailing market prices and make it more difficult to replace our directors and management.
As a result, our governance structure and the Voting Trust may have the effect of depriving our stockholders of an opportunity to sell their shares at a premium over prevailing market prices and make it more difficult to replace our directors and management.
We do not collect and maintain reserves from our sellers to cover these potential losses. The risk of chargebacks is typically greater with those of our sellers that promise future delivery of goods and services, which we allow on our service.
We do not collect and maintain reserves from our sellers to cover these potential losses. The risk of chargebacks is typically greater with those of our sellers that promise future 39 Table of Contents delivery of goods and services, which we allow on our service.
Our business may be adversely affected by these restrictions on our ability to operate our business. Additionally, our ability to meet our debt obligations and other expenses will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we are unable to control.
Our business may be adversely affected by any such restrictions on our ability to operate our business. Additionally, our ability to meet our debt obligations and other expenses will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we are unable to control.
Any failure to comply with the GLBA could result in substantial financial penalties. 42 Table of Contents Additionally, the Federal Trade Commission ("FTC") and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.
Any failure to comply with the GLBA could result in substantial financial penalties. Additionally, the Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, 44 Table of Contents dissemination and security practices that appear to be unfair or deceptive.
If the perceived value of our stock declines, it may adversely affect our ability to recruit and retain highly skilled employees. Many of the companies with which we compete for experienced personnel have greater resources than we have.
If the perceived value of our stock declines, it may adversely affect our ability to recruit and retain highly skilled employees. 38 Table of Contents Many of the companies with which we compete for experienced personnel have greater resources than we have.
Our current indebtedness, including our loan and security agreement with CIBC, contains, and our future indebtedness may contain, restrictions on our ability to pay cash dividends on our capital stock.
Our current indebtedness, including our LOC Security Agreement with CIBC, contains, and our future indebtedness may contain, restrictions on our ability to pay cash dividends on our capital stock.
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 and antitrust laws, may be interpreted 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.
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.
The loss of one or more of our executive officers or key employees could have a serious adverse effect on our business. In addition, we depend on certain professional services firms for a portion of our finance function.
The loss of one or both of our executive officers or other key employees could have a serious adverse effect on our business. In addition, we depend on certain professional services firms for a portion of our finance function.
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. 22 Table of Contents If we are unable to accomplish these tasks, our growth, including our revenue growth, would be harmed.
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; 23 Table of Contents • 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 registered all of the shares of Class A common stock issuable upon the exercise of outstanding options, upon the settlement of restricted stock units ("RSUs") issued following our initial public offering ("IPO") or in connection with other equity incentives we may grant in the future, for public resale under the Securities Act.
We registered all of the shares of Class A common stock issuable upon the exercise of outstanding options, upon the settlement of restricted stock units (“RSUs”) issued following our initial public offering (“IPO”) or in connection with other equity incentives we may grant in the future, for public resale under the Securities Act.
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.
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.
Our amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. 63 Table of Contents In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered or intend to enter into with our directors and officers provide that: • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered or intend to enter into with our directors and officers provide that: • we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.
In addition, various news sources, bloggers and other publishers often make statements regarding our historical or projected business or financial performance, and you should not rely on any such information even if it is attributed directly or indirectly to us.
In addition, various news sources, bloggers and other publishers often make statements regarding our historical or projected business or financial performance, and you should not rely on any such information even if it is attributed directly or indirectly 58 Table of Contents to us.
We engage in various initiatives to manage ESG matters and address related stakeholder expectations; however, such initiatives can be costly and may not have the desired effect. Methodologies and data for such initiatives are complex and continue to evolve. Moreover, stakeholder expectations are not uniform and, at times, conflict.
We engage in various initiatives to manage ESG matters and address related stakeholder expectations; however, such initiatives can be costly and may not have the desired effect. Methodologies and data for such initiatives are complex and continue to evolve. Moreover, stakeholder expectations are not uniform 66 Table of Contents and, at times, conflict.
We may recognize additional tax expense and be subject to additional tax liabilities due to changes in tax laws, regulations, and administrative practices and principles, including changes to the tax framework in the jurisdictions in which we operate. We are subject to regular review and audit by U.S. federal, state, and foreign tax authorities.
We may recognize additional tax expense and be subject to additional tax liabilities due to changes in tax laws, regulations, and administrative practices and principles, including changes to the tax framework in the jurisdictions in which we operate. 59 Table of Contents We are subject to regular review and audit by U.S. federal, state, and foreign tax authorities.
Substantial losses due to fraud or our inability to accept credit card payments would cause our customer base to significantly decrease and would harm our business. Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations.
Substantial losses due to fraud or our inability to accept credit card payments would cause our customer base to significantly decrease and would harm our business. 40 Table of Contents Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of 61 Table of Contents management from our business, and adversely affect our business, results of operations and financial condition. See Part I, Item 3 "Legal Proceedings" for additional information regarding our legal proceedings.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, results of operations and financial condition. See Part I, Item 3 “Legal Proceedings” for additional information regarding our legal proceedings.
In addition to laws relating to data privacy and security, we are subject to self-regulatory standards and industry certifications that may legally or contractually apply to us. These include the Payment Card Industry Data Security Standards ("PCI-DSS") with which we are currently compliant.
In addition to laws relating to data privacy and security, we are subject to self-regulatory standards and industry certifications that may legally or contractually apply to us. These include the Payment Card Industry Data Security Standards (“PCI-DSS”) with which we are currently compliant.
Factors that may cause such disruptions or problems include: • human error; • security breaches; • telecommunications failures or outages from third-party providers; 44 Table of Contents • computer viruses, malware, vulnerability exploits, or cyber-attacks; • software errors, failures, vulnerabilities or bugs in our features; • acts of terrorism, sabotage or other intentional acts of vandalism; • unforeseen interruption or damages; • pandemics and epidemics; • tornados, fires, earthquakes, floods and other natural disasters; and • power loss.
Factors that may cause such disruptions or problems include: • human error; • security breaches; • telecommunications failures or outages from third-party providers; 46 Table of Contents • computer viruses, malware (including ransomware), vulnerability exploits, social engineering/phishing, or cyber-attacks; • software errors, failures, vulnerabilities or bugs in our features; • acts of terrorism, sabotage or other intentional acts of vandalism; • unforeseen interruption or damages; • pandemics and epidemics; • tornados, fires, earthquakes, floods and other natural disasters; and • power loss.
The members of the Executive Committee currently are, and their successors are generally expected to be, directors who are also our employees or service providers, and the Executive Committee currently consists of David Barrett, Ryan Schaffer, Anu Muralidharan, Jason Mills and Daniel Vidal.
The members of the Executive Committee currently are, and their successors are generally expected to be, directors who are also our employees or service providers, and the Executive Committee currently consists of David Barrett, Ryan Schaffer, Carlos Alvarez, Jason Mills and Daniel Vidal.
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.
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.
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.
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.
We also plan to enhance our brand and drive interest in our overall platform by 32 Table of Contents introducing certain consumer-focused features, which may not be successful. Substantial advertising expenditures may be required to maintain and enhance our brand, which may not prove successful.
We also plan to enhance our brand and drive interest in our overall platform by introducing certain consumer-focused features, which may not be successful. Substantial advertising expenditures may be required to maintain and enhance our brand, which may not prove successful.
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. We expect that increased investment will be required in the future to continuously improve our use of AI Technologies.
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. We expect that increased investment will be required in the future to continuously improve our use of AI Technologies.
Under the 2024 Amended Loan and Security Agreement, an event of default will occur if, among other things, we fail to make payments under such agreement; we breach certain of our covenants under such agreement, subject to specified 54 Table of Contents cure periods with respect to certain breaches; we or our assets become subject to certain legal proceedings, such as bankruptcy proceedings; we are unable to pay our debts as they become due; or we default on contracts with third parties which would permit CIBC to accelerate the maturity of such indebtedness or that could have a material adverse change on us.
Under the LOC Security Agreement, an event of default will occur if, among other things, we fail to make payments under such agreement if due; we breach certain of our covenants under such agreement, subject to specified cure periods with respect to certain breaches; we or our assets become subject to certain legal proceedings, such as bankruptcy proceedings; we are unable to pay our debts as they become due; or we default on contracts with third parties which would permit CIBC to accelerate the maturity of any 56 Table of Contents outstanding indebtedness or that could have a material adverse change on us.
Our operating activities may be restricted as a result of covenants related to the indebtedness under our 2024 Amended Loan and Security Agreement and/or future indebtedness, and we may be required to repay the outstanding indebtedness in an event of default, which would have an adverse effect on our business.
Our operating activities may be restricted as a result of covenants related to the indebtedness under our LOC Security Agreement and/or future indebtedness, and we may be required to repay any outstanding indebtedness in an event of default, which would have an adverse effect on our business.
In addition, we are contemplating offering certain products in the future that may require us to obtain licenses to operate as a money transmitter (or its equivalent) in various states and territories where such licenses are required. We have already obtained such licenses in certain states and have pending license applications in others.
In addition, we are contemplating offering certain products in the future that may require us to obtain licenses to operate as a money transmitter (or its equivalent) in various states and territories where such licenses are required. We have already obtained such licenses in most states.
New investors in 62 Table of Contents subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Class A common stock.
New investors in subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Class A common stock.
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.
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.
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.
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. 35 Table of Contents We use third-party AI Technologies and infrastructure which may pose operational and data security risks.
While to date no material adjustments have been requested by tax authorities, including by the IRS related to its examination of the 2021 and 2022 tax years, an unfavorable outcome from any tax examination or audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations.
While to date no material adjustments have been requested by tax authorities, an unfavorable outcome from any tax examination or audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations.
Our culture is centered on a belief that a life well lived is one that enables you to achieve the following three goals: Live Rich, Have Fun and Save the World. We have invested substantial time and resources in building our team with an emphasis on collaboration and innovation, ensuring customer success and a commitment to diversity and inclusion.
Our culture is centered on a belief that a life well lived is one that enables you to achieve the following three goals: Live Rich, Have Fun and Save the World. We have invested substantial time and resources in building our team with an emphasis on collaboration and innovation and promoting success for both our customers and our employees.
If such transition is not successful, or if we otherwise lose our Expensify Card vendor, issuing bank or card network for any reason, we could experience service interruptions as well as delays and additional expenses, and we may be unable to replace these services on competitive terms, or at all, which could harm our business, results of operations, financial condition and growth prospects.
If such transition is not successful, or if we otherwise lose our Expensify Card vendor, issuing bank or card network for any reason, we could experience service interruptions as well as delays and additional expenses, and we may be unable to replace these services on competitive terms, or at all, which could harm our business, results of operations, financial condition and growth prospects. 31 Table of Contents We rely on a single third-party vendor and travel management company (“TMC”) for Expensify Travel, and if we lose any of these services, our business, results of operations, financial condition and growth prospects could be harmed.
Our 2024 Amended Loan and Security Agreement consists of a $25.0 million revolving line of credit, which matures in September 2025, and subjects us, and any future indebtedness would likely subject us, to various customary covenants, including requirements as to financial reporting, insurance and certain liquidity and leverage thresholds and restrictions on our ability to maintain cash deposits outside of CIBC above certain thresholds, dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to engage in transactions with affiliates, to encumber our intellectual property and certain other restrictions on our activities.
Our LOC Security Agreement consists of a $7.5 million irrevocable standby letter of credit, which matures on March 20, 2026, and subjects us, and any future indebtedness would likely subject us, to various customary covenants, including requirements as to financial reporting, restrictions on our ability to maintain cash deposits outside of CIBC above certain thresholds, to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to engage in transactions with affiliates, to encumber our intellectual property and certain other restrictions on our activities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee Risk Factor 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 .
Biggest changeSee Risk Factor 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 . 67 Table of Contents Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function, including oversight of cybersecurity and other information technology risks.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material cybersecurity risks to our critical systems, and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile. 66 Table of Contents We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material cybersecurity risks to our critical systems, and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and external cybersecurity consultants. Our Chief Compliance Officer and Director of Engineering have over 8 and 12 years of experience, respectively, in various software development, cybersecurity, product management, and other technology-related roles.
Our Chief Compliance Officer and Director of Engineering have over 9 and 13 years of experience, respectively, in various software development, cybersecurity, product management, and other technology-related roles.
In addition, management updates the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant. Our management team, including our Chief Compliance Officer and Director of Engineering, is responsible for assessing and managing our material risks from cybersecurity threats.
The Board oversees management’s implementation of our cybersecurity risk management program. The Board receives periodic reports from management on our cybersecurity risks. In addition, management updates the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant.
Removed
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function, including oversight of cybersecurity and other information technology risks. The Board oversees management’s implementation of our cybersecurity risk management program. The Board receives periodic reports from management on our cybersecurity risks.
Added
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Added
Our management team, including our Chief Compliance Officer and Director of Engineering, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and external cybersecurity consultants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties In the United States, our company has offices in Portland, Oregon, San Francisco, California, and Ironwood, Michigan. We own our office space in Portland, which consists of approximately 38,500 square feet. Our office space in San Francisco, consisting of approximately 10,500 square feet, is leased through May 31, 2034.
Biggest changeItem 2. Properties In the United States, our company has offices in San Francisco, California, Portland, Oregon, and Ironwood, Michigan. Our office space in San Francisco, consisting of approximately 10,500 square feet, is leased through May 31, 2034. We own our office space in Portland, which consists of approximately 38,500 square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint alleges claims under Sections 11 and 15 of the Securities Act of 1933 based on allegedly false or misleading statements in the offering documents filed in connection with our IPO. The lawsuit seeks unspecified damages and other relief. On January 29, 2024, three shareholders moved to be appointed lead plaintiff in the Putative Class Action.
Biggest changeThe lawsuit seeks unspecified damages and other relief. On January 29, 2024, three shareholders moved to be appointed lead plaintiff in the Putative Class Action. The court appointed a lead plaintiff and lead counsel on March 11, 2024.
We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Defending such proceedings is costly and can impose a significant burden on management and employees.
We have 69 Table of Contents received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Defending such proceedings is costly and can impose a significant burden on management and employees.
The court appointed a lead plaintiff and lead counsel on March 11, 2024. Pursuant to the parties’ stipulation, the lead plaintiff’s amended complaint was filed May 10, 2024, naming six of our current board members as additional defendants (together with the Defendants, the “Amended Defendants”). Amended Defendants’ motion to dismiss the amended complaint was filed on July 9, 2024.
Pursuant to the parties’ stipulation, the lead plaintiff’s amended complaint was filed May 10, 2024 (the “Amended Complaint”), naming six of our current board members as additional defendants (together with the Defendants, the “Amended Defendants”). Amended Defendants’ motion to dismiss the amended 68 Table of Contents complaint was filed on July 9, 2024.
Barrett, et al., Case No. 3:24-cv-00775 (the “O’Halloran Action”), purportedly on our behalf, naming us as nominal defendant, and all of our current board members and executive officers and two of our former directors as defendants (collectively, the “Derivative Defendants”).
Barrett, et al., Case No. 3:24-cv-00775 (the “O’Halloran Action”), purportedly on our behalf, naming us as nominal defendant, and our executive officers and several of our current and former directors as defendants (collectively, the “Derivative Defendants”). On August 14, 2024, the Court stayed the O’Halloran Action pending resolution of any and all motion(s) to dismiss the Putative Class Action.
On August 14, 2024, the Court stayed the O’Halloran Action pending resolution of any and all motion(s) to dismiss the Putative Class Action. On December 18, 2024, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned Da Silva v.
On December 18, 2024, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned Da Silva v.
The lead plaintiff and Amended Defendants each filed objections to the magistrate judge’s findings and recommendation on January 21, 2025, and responses to the objections on February 4, 2025. The district court has not yet ruled on the Amended Defendants’ motion to dismiss or on the parties’ objections to the magistrate judge’s findings and recommendation.
The lead plaintiff and Amended Defendants each filed objections to the magistrate judge’s findings and recommendation on January 21, 2025, and responses to the objections on February 4, 2025. On March 24, 2025, the Court adopted, with limited modification, the magistrate’s findings and recommendations to grant in part and deny in part Defendants’ motion to dismiss the Amended Complaint.
Item 3. Legal Proceedings On November 29, 2023, a putative securities class action (the “Putative Class Action”) was filed in the United States District Court for the District of Oregon captioned Wilhite v.
Item 3. Legal Proceedings On November 29, 2023, a putative securities class action (the “Putative Class Action”) was filed in the United States District Court for the District of Oregon captioned Wilhite v. Expensify, Inc., et al., Case No. 3:23-cv-01784-JR, naming us, our executive officers and several of our current and former directors as defendants (collectively, the “Defendants”).
Removed
Expensify, Inc., et al., Case No. 67 Table of Contents 3:23-cv-01784-JR, naming us, two of our executive officers and two of our former directors as defendants (collectively, the “Defendants”). The lawsuit is purportedly brought on behalf of all those who purchase or acquired our stock pursuant or traceable to our initial public offering (“IPO”).
Added
The lawsuit is purportedly brought on behalf of all those who purchased or acquired our stock pursuant or traceable to our initial public offering (“IPO”). The complaint alleges claims under Sections 11 and 15 of the Securities Act of 1933 based on allegedly false or misleading statements in the offering documents filed in connection with our IPO.
Added
On December 17, 2025, after conducting mediation within the current discovery phase of the lawsuit, the parties reached an agreement-in-principle to settle all claims in the Putative Class Action for an aggregate sum of $9.5 million. As of December 31, 2025, this liability amount is includ ed within Accrued expenses and other liabilities on the Consolidated Balance Sheets .
Added
The settlement accrual will be partially offset by a receivable of $6.7 million for amounts recoverable under our applicable insurance policies , which was included within Other current assets on the Consolidated Balance Sheets as of December 31, 2025.
Added
During the year ended December 31, 2025, the Company recorded an expense of $2.8 million for the proposed settlement, net of the Company's insurance receivable, within General and administrative on the Consolidated Statements of Operations. On December 30, 2025, the Court stayed further deadlines in the Putative Class Action as the parties had reached settlement in principle.
Added
On February 12, 2026, lead plaintiff filed a stipulation of settlement and an unopposed motion for preliminary approval of settlement. On February 23, 2026, the Court granted preliminary approval of the settlement and set a final approval hearing for June 30, 2026.
Added
On July 23, 2025, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned Choi v. Barrett, et al., Case No. 3:25-cv-1300 (the “Choi Action”), purportedly on our behalf against the Derivative Defendants and asserting substantively the same claims as those asserted in the O’Halloran Action.
Added
On October 20, 2025, the Court granted the parties’ stipulation to stay the Choi Action pending final resolution of the Putative Class Action. The Derivative Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the Derivative Action.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRECENT SALES OF UNREGISTERED SECURITIES None. 69 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The following table sets forth information regarding our purchases of shares of Class A common stock during the three months ended December 31, 2024: Total number of shares purchased Weighted average price paid per share Total number of shares purchased as part of publicly announced programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the program (1) October 1 - 31, 2024 — $ — — $ 39,490,003 November 1 - 30, 2024 — $ — — $ 39,490,003 December 1 - 31, 2024 — $ — — $ 39,490,003 Total — — (1) On May 12, 2022, we announced the approval of a share repurchase program with authorization to purchase up to $50.0 million of our Class A common stock at management’s discretion.
Biggest changeRECENT SALES OF UNREGISTERED SECURITIES None. 71 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The following table sets forth information regarding our purchases of shares of Class A common stock during the three months ended December 31, 2025: Total number of shares purchased Weighted average price paid per share Total number of shares purchased as part of publicly announced programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the program (1) October 1 - 31, 2025 — $ — — $ 44,000,006 November 1 - 30, 2025 740,052 $ 1.48 740,052 $ 42,902,561 December 1 - 31, 2025 1,217,967 $ 1.56 1,217,967 $ 41,000,511 Total 1,958,019 1,958,019 (1) On February 27, 2025, we announced the approval of a new share repurchase program with authorization to purchase up to $50.0 million of our Class A common stock at management's discretion which expires on March 31, 2028 and does not obligate us to repurchase any specific number of shares and may be modified, suspended or terminated at any time at our discretion.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION FOR CLASS A COMMON STOCK Our Class A Common Stock has been listed on the Nasdaq Global Select Market under the symbol "EXFY" since November 10, 2021. Our LT10 and LT50 common stock are neither listed nor publicly traded.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION FOR CLASS A COMMON STOCK Our Class A Common Stock has been listed on the Nasdaq Global Select Market under the symbol “EXFY” since November 10, 2021. Our LT10 and LT50 common stock are neither listed nor publicly traded.
HOLDERS OF OUR COMMON STOCK As of February 24, 2025, there were 17 stockholders of record of our Class A common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
HOLDERS OF OUR COMMON STOCK As of February 23, 2026, there were 15 stockholders of record of our Class A common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
As of February 24, 2025, the Expensify Voting Trust held all of the outstanding shares of our LT10 common stock and LT50 common stock.
As of February 23, 2026, the Expensify Voting Trust held all of the outstanding shares of our LT10 common stock and LT50 common stock.
The 2025 repurchase program expires on March 31, 2028 and does not obligate us to repurchase any specific number of shares and may be modified, suspended or terminated at any time at our discretion. 70 Table of Contents PERFORMANCE GRAPH This performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing of Expensify, Inc. under the Securities Act or the Exchange Act.
As of December 31, 2025, we had $41.0 million remaining under the share repurchase authorization. 72 Table of Contents PERFORMANCE GRAPH This performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing of Expensify, Inc. under the Securities Act or the Exchange Act.
Removed
The 2022 repurchase program was scheduled to expire in March 2025. On February 27, 2025, we announced the approval of a new share repurchase program with authorization to purchase up to $50.0 million of our Class A common stock at management's discretion, which replaced the 2022 share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdjusted EBITDA and Adjusted EBITDA Margin Year ended December 31, 2024 2023 (in thousands, except percentages) Net loss $ (10,055) $ (41,456) Net loss margin (7) % (28) % Add: Provision for income taxes 7,663 2,980 Interest and other expenses, net 1,572 5,327 Depreciation and amortization 6,655 5,111 Stock-based compensation expense 33,537 41,212 Adjusted EBITDA $ 39,372 $ 13,174 Adjusted EBITDA margin 28 % 9 % 87 Table of Contents Non-GAAP net income and non-GAAP net income margin Year ended December 31, 2024 2023 (in thousands, except percentages) Net loss $ (10,055) $ (41,456) Net loss margin (7) % (28) % Add: Stock-based compensation expense 33,537 41,212 Non-GAAP net income (loss) $ 23,482 $ (244) Non-GAAP net income (loss) margin 17 % — % Adjusted Operating Cash Flow and Free Cash Flow Year ended December 31, 2024 2023 (in thousands, except percentages) Net cash provided by operating activities $ 23,877 $ 1,559 Operating cash flow margin 17 % 1 % (Increase) decrease in changes in assets and liabilities: Settlement assets, net 2,469 6,398 Settlement liabilities 5,145 (108) Adjusted operating cash flow 31,491 7,849 Less: Purchase of property and equipment — (1,384) Software development costs (7,628) (5,910) Free cash flow $ 23,863 $ 555 Free cash flow margin 17 % — % 88 Table of Contents Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2024: Payments due by period (in thousands) Less than 1 year 1-3 years More than 3 years Total Finance lease commitments $ 153 $ 102 $ — $ 255 Operating lease commitments 1,079 3,114 4,499 8,692 Total $ 1,232 $ 3,216 $ 4,499 $ 8,947 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.
Biggest changeYear 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 % 89 Table of Contents 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.
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.
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.
Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business. 74 Table of Contents 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.
Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business. 76 Table of Contents 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.
We satisfy our performance obligation over time each month as it provides the SaaS and support services to customers and as such generally recognizes revenue monthly based on the number of monthly members and contractual rate per member.
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.
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. 76 Table of Contents 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 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. 78 Table of Contents 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 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 expand our research and development team to develop new products and product enhancements.
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.
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. 84 Table of Contents 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.
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. 86 Table of Contents 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.
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.
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.
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. 77 Table of Contents 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.
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. 79 Table of Contents 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.
We monetize transactions from the Expensify Card by receiving a percentage of the 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 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.
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 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.
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 73 Table of Contents 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.
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.
We define non-GAAP net income margin as non-GAAP net income divided by total revenue for the same period.
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 86 Table of Contents otherwise be masked by the effect of stock-based compensation, which is not considered indicative of the core operating performance of our business.
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.
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 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 are focused on profitable growth and we consider adjusted EBITDA to be an important measure because it helps 85 Table of Contents 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.
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.
As such, we recognize interchange as revenue on a gross basis within Revenue on the accompanying 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. 90 Table of Contents
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. 91 Table of Contents
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 employees and often convince decision makers to adopt Expensify company-wide.
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 74 Table of Contents employees and often convince decision makers to adopt Expensify company-wide.
Pursuant to the 2025 Share Repurchase Program, we may 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 Exchange Act, in accordance with applicable securities laws and other restrictions.
Under the 2025 Share Repurchase Program, we may repurchase shares from time to time through open market purchases, in privately negotiated transactions 84 Table of Contents 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.
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 monthly members. Month-to-month contracts can be terminated by either party at any time without penalty.
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 90 Table of Contents monthly members. Month-to-month contracts can be terminated by either party at any time without penalty.
Since our founding in 2008, we have added over 15 million members to our community and processed and automated over 1.7 billion expense transactions on our platform as of December 31, 2024, freeing people to spend less time managing expenses and more time doing the things they love.
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.
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, 2024 and 2023, we recorded an incremental valuation allowance of $0.9 million and $3.7 million, respectively.
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.
In 2024 and 2023, our net seat retention was 86% and 99%, 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 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.
The effective income tax rate differs from the statutory rate in 2024 primarily due to nondeductible stock-based compensation, the compensation limitations imposed by Internal Revenue Code ("IRC") Section 162(m), 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.
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 80 Table of Contents basis of the assets and liabilities.
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.
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 (320.4)% and (7.7)%, for the years ended December 31, 2024 and 2023, 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.
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.
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.
The following table sets forth the average number of paid members for the quarters ended March 31, 2023 through December 31, 2024 (in thousands): Quarter ended Paid members March 31, 2023 747 June 30, 2023 742 September 30, 2023 719 December 31, 2023 719 March 31, 2024 688 June 30, 2024 684 September 30, 2024 684 December 31, 2024 687 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.
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.
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.
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.
Adjusted EBITDA and Adjusted EBITDA Margin We define adjusted EBITDA as net loss from operations excluding provision for income taxes, interest and other expenses, net, depreciation and amortization and stock-based compensation. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue for the same period.
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.
Share Repurchase Program On May 10, 2022, 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").
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”).
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.
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. 87 Table of Contents 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.
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 and external professional services, including finance and accounting, audit, tax, 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.
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, realized gains and losses on foreign currency transactions and foreign currency remeasurement.
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”).
We may 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 Exchange Act, in accordance with applicable securities laws and other restrictions.
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.
For the year ended December 31, 2024, an average of 687,000 paid members across an average of 47,600 companies and over 200 countries and territories used Expensify to make money easy.
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.
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.
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.
Certain Covenants We are subject to customary covenants under the 2024 Amended Loan and Security Agreement, which, unless waived by CIBC, restrict our and our subsidiaries' ability to, among other things, incur additional indebtedness, create or incur liens, permit a change of control, merge or consolidate with other companies, sell or transfer assets, pay dividends or make distributions, make acquisitions, investments or loans, or payments and prepayments of subordinated indebtedness, subject to certain exceptions.
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.
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.
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.
On April 24, 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.
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.
Year ended December 31, 2024 2023 (in thousands, except percentages) Non-GAAP net income (loss) $ 23,482 $ (244) Non-GAAP net income (loss) margin 17 % — % Free Cash Flow We define free cash flow as net cash provided by operating activities excluding changes in settlement assets 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.
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.
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.
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 effective income tax rate differs from the statutory rate in 2023 primarily due to nondeductible stock-based compensation, the change in the valuation allowance, and the compensation limitations imposed by IRC Section 162(m).
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 then-outstanding balance of $15.0 million and an immaterial amount of accrued interest on the revolving line of credit were repaid in full on July 10, 2024.
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.
The 2022 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, 2024, there was approximately $39.5 million remaining under the share repurchase authorization.
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.
The 2022 Share Repurchase Program was scheduled to expire on March 31, 2025. 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 ("2025 Share Repurchase Program") that replaces the 2022 Share Repurchase Program.
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”).
Provision for Income Taxes Year ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Provision for income taxes $ (7,663) $ (2,980) $ (4,683) 157 % We recorded a provision for income taxes of $7.7 million for the year ended December 31, 2024 compared to a $3.0 million provision for income taxes for the year ended December 31, 2023.
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.
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 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.
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.
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.
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 the issuing bank.
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.
In 2024 and 2023, our annual gross logo retention was 81% and 74%, respectively.
In each of 2025 and 2024, our annual gross logo retention was 81%.
The actual timing, manner, price and total amount of future repurchases will depend on a variety of factors, including business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, restrictions under the terms of loan agreements and other considerations.
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.
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.
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.
During the year ended December 31, 2023, net cash used in financing activities was $45.3 million, primarily consisting of principal payments on the term loan, the repurchase and retirement of common stock, and payment for employees taxes withheld from stock-based awards, which was partially offset by proceeds from common stock purchased under 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.
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.
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. 75 Table of Contents 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.
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.
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.
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. 72 Table of Contents 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.
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.
In 2024 we invested in a promotional marketing opportunity to have Expensify heavily featured in Apple's biggest budget film, F1, which is scheduled to be released in theaters on June 27, 2025. Our goal is that this will increase our brand awareness and support our bottom-up, word of mouth marketing.
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.
Cost of Revenue, Net Cost of revenue, net primarily consists of expenses related to hosting our service, including the costs of data center capacity, credit card processing fees, third-party software license fees, outsourcing engineering costs to maintain our platform, outsourcing costs to support customer service and outsourcing costs to support our patented scanning technology SmartScan, net of consideration from a vendor for monetizing Expensify Card activities.
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 77 Table of Contents 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.
The following table sets forth our results of operations for the periods presented: Year ended December 31, 2024 2023 (in thousands, except per share data) Revenue $ 139,236 $ 150,687 Cost of revenue, net (1) 64,239 66,888 Gross margin 74,997 83,799 Operating expenses: Research and development (1) 24,638 23,368 General and administrative (1) 38,382 49,228 Sales and marketing (1) 12,797 44,352 Total operating expenses 75,817 116,948 Loss from operations (820) (33,149) Interest and other expenses, net (1,572) (5,327) Loss before income taxes (2,392) (38,476) Provision for income taxes (7,663) (2,980) Net loss $ (10,055) $ (41,456) Net loss per share: Basic and diluted $ (0.12) $ (0.50) Weighted average shares of common stock used to compute net loss per share: Basic and diluted 87,380,708 82,493,226 Net loss margin (7) % (28) % (1) Includes stock-based compensation expense as follows: Year ended December 31, 2024 2023 (in thousands) Cost of revenue, net $ 12,506 $ 13,868 Research and development 11,900 10,870 General and administrative 6,815 9,842 Sales and marketing 2,316 6,632 Total stock-based compensation expense $ 33,537 $ 41,212 78 Table of Contents COMPARISON OF THE YEARS ENDED DECEMBER 31, 2024 AND 2023 Revenue Year ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Revenue $ 139,236 $ 150,687 $ (11,451) (8) % Revenue decreased $11.5 million, or 8%, for the year ended December, 31, 2024 compared to the same period in 2023, primarily due to (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.
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 80 Table of Contents 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.
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 (our remainder portion, "Expensify interchange amount"). The vendor also charges us fees ("vendor fees") for the services it provides to us.
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.
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. Additionally, in 2023 we hosted our third ExpensiCon, an invite-only, all-expenses paid industry conference, with the goal of increasing our market consensus among our Approved! Accounting partners and increasing adoption of our platform.
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.
The increase is primarily due to a decrease in marketing and advertising spend and a decrease in outsourcing activities related to sales and product demos, partially offset by a decrease in revenue. CASH FLOWS FROM INVESTING ACTIVITIES During the year ended December 31, 2024, net cash used in investing activities was $7.6 million, primarily consisting of software development costs.
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.
In May 2024, we entered into a First Amendment to the 2024 Amended Loan and Security Agreement, which amended the covenant restricting the amount of repurchases of common stock to allow for certain additional repurchase activity and provided a waiver for our non-compliance during prior periods with the previous version of such covenant.
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.
See Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information.
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.
Net cash used in investing activities increased for the year ended December 31, 2024 compared to the same period in 2023, primarily due to an increase in employee and external contributor software development costs offset by a decrease in the purchase of property and equipment. 81 Table of Contents CASH FLOWS FROM FINANCING ACTIVITIES During the year ended December 31, 2024, net cash used in financing activities was $22.1 million, primarily consisting of the repayment of the revolving line of credit and the amortizing term mortgage, and the repurchase and retirement of common stock, which was partially offset by proceeds from common stock purchased under our 2021 Stock Purchase and Matching Plan ("Matching Plan").
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”).
The 2024 Amended Loan and Security Agreement provides for a $25.0 million revolving credit facility. Borrowings under the revolving line of credit accrue interest at CIBC’s reference rate plus 1.00% and are secured by substantially all our assets. We incurred an immaterial amount of costs in connection with entering into the 2024 Amended Loan and Security Agreement.
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 following summarizes these various amounts for each of the periods presented: Year ended December 31, 2024 2023 (in thousands) Expensify interchange amount $ 8,014 $ 11,144 Vendor fees (821) (1,009) Consideration from a vendor, net $ 7,193 $ 10,135 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.
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.
CASH FLOWS The following table summarizes our cash flows for the periods indicated: Year ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 23,877 $ 1,559 Net cash used in investing activities (7,628) (7,294) Net cash used in financing activities (22,073) (45,317) Net decrease in cash and cash equivalents and restricted cash $ (5,824) $ (51,052) CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by operating activities was $23.9 million for the year ended December 31, 2024 as compared to $1.6 million for the same period in 2023.
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. 83 Table of Contents 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.
We recognize revenue net of applicable taxes imposed on the related transaction. During the year ended December 31, 2024, the Expensify Card consisted of two card programs operating concurrently: the "Legacy Card Program," which was the original program when the Expensify Card launched in 2020, and the "Updated Card Program," which launched in February 2024.
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”).
We monetize bookings via Expensify Travel by charging a booking fee on each booking.
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.
The then-outstanding balance of $36.0 million and $0.1 million of accrued interest on the term loan were repaid in full on October 12, 2023. 2024 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, and as may be further amended from time to time, the "2024 Amended Loan and Security Agreement") with CIBC.
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.
Under the Updated Card Program, we are the principal in the transaction and recognize interchange as revenue on a gross basis within Revenue on the accompanying Consolidated Statements of Operations. Interchange revenue was $9.2 million for the year ended December 31, 2024.
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.
Instead, the net of the Expensify interchange amount and vendor fees are paid to us, which we record as "Consideration from a vendor, net," a contra expense in Cost of revenue, net on the Consolidated Statements of Operations.
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.
Research and Development Year ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Research and development $ 24,638 $ 23,368 $ 1,270 5 % Research and development expenses increased by $1.3 million, or 5%, for the year ended December 31, 2024 compared to the same period in 2023, primarily due to an increase in employee time spent on project initiatives and new product features, partially offset by a decrease in total employee and employee related expenses subject to allocation. 79 Table of Contents General and Administrative Year ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) General and administrative $ 38,382 $ 49,228 $ (10,846) (22) % General and administrative expenses decreased $10.8 million, or 22%, for the year ended December 31, 2024 compared to the same period in 2023, primarily due to (i) a decrease in total employee related expenses subject to allocation, (ii) a decrease in settlement losses, and (iii) a decrease in business insurance expense.
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. 81 Table of Contents 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.
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. See Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information.
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.
Year ended December 31, 2024 2023 (in thousands, except percentages) Adjusted EBITDA $ 39,372 $ 13,174 Adjusted EBITDA margin 28 % 9 % Non-GAAP Net Income and Non-GAAP Net Income Margin We define non-GAAP net income as net loss from operations in accordance with GAAP excluding stock-based compensation.
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 % 88 Table of Contents Non-GAAP Net Income and Non-GAAP Net Income Margin We define non-GAAP net income as net loss excluding stock-based compensation expense.
Consideration from a vendor is related to the Expensify Card under the Legacy Card Program, where we use a third-party vendor to issue Expensify Cards and process the related transactions. The vendor is contractually entitled to the interchange through its relationships with the card network and card issuing bank.
(“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.
As of December 31, 2024, we were not in compliance with all debt coven ants under the 2024 Amended Loan and Security Agreement, specifically the covenant restricting the amount of repurchases of common stock, which includes net share settlements of stock-based awards.
As of December 31, 2025, we were in compliance with all debt covenants under the LOC Security Agreement.
Cost of Revenue, Net and Gross Margin Year ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Cost of revenue, net $ 64,239 $ 66,888 $ (2,649) (4) % Gross margin $ 74,997 $ 83,799 $ (8,802) (11) % Gross margin % 54 % 56 % Cost of revenue, net decreased by $2.6 million, or 4%, for the year ended December 31, 2024 compared to the same period in 2023.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results.
Biggest changeWe do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results. INFLATION RISK We do not believe that inflation has had a material impact on our business, results of operations or financial condition.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, results of operations or financial condition. 91
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, results of operations or financial condition. 92 Table of Contents
Removed
INTEREST RATE RISK We are subject to interest rate risk in connection with borrowings under our amortizing term mortgage, our monthly revolving line of credit and our amortizing term loan. Interest rate changes generally impact the amount of our interest payments and, therefore, our future profitability and cash flows.
Removed
Assuming the amounts outstanding under these borrowing facilities are fully drawn, a hypothetical 10% change in interest rates would not have a material impact on our consolidated financial statements. INFLATION RISK We do not believe that inflation has had a material impact on our business, results of operations or financial condition.

Other EXFY 10-K year-over-year comparisons