Expensify Announces Share Repurchase Program

Rhea-AI Summary

Expensify (NASDAQ: EXFY) has announced a new share repurchase program authorizing up to $50 million of Class A common stock. This program replaces the previous 2022 buyback initiative and will run until March 31, 2028.

The company's CFO Ryan Schaffer highlighted that successful cost-cutting measures have led to increased free cash flow, creating an attractive buying opportunity. Having become debt-free last year, Expensify views buybacks as a logical way to utilize free cash flow and return value to shareholders.

The repurchase program aims to offset dilution from stock issuances and reduce share count over time. Shares may be repurchased through open market purchases, private transactions, or other means, including Rule 10b5-1 trading plans. The program's timing and amount will depend on market conditions, regulatory requirements, and stock prices, and can be suspended or discontinued at any time.

Positive

• Authorized $50M share buyback program
• Company is debt-free
• Increased free cash flow from cost-cutting measures
• Program extends until March 2028, providing long-term flexibility

Negative

• Program can be suspended or discontinued at any time
• Buyback execution dependent on market conditions and restrictions

Insights

Financial Analyst

Expensify's new $50 million share repurchase program represents a significant capital allocation decision that warrants investor attention. With a current market cap of just $277.6 million, this authorization encompasses approximately 18% of the company's outstanding value – a substantial commitment that could meaningfully reduce share count and potentially support the stock price.

The timing is particularly noteworthy as Expensify didn't wait for its existing buyback program to expire in March 2025, suggesting management sees compelling value at the current $3.17 share price. This accelerated replacement signals strong conviction in their financial outlook following what CFO Ryan Schaffer described as successful cost-cutting measures that have significantly boosted free cash flow.

For a fintech company that recently achieved debt-free status, this buyback reflects a strategic pivot toward shareholder returns rather than reinvestment in growth initiatives. This could indicate either high-ROI growth opportunities in their core business or extreme confidence that the market is substantially undervaluing their shares.

The program's three-year duration through March 2028 provides management with considerable flexibility to time purchases advantageously. However, investors should note the standard caveat that the company isn't obligated to repurchase any shares, making the actual execution worth monitoring in coming quarters.

While share repurchases can enhance EPS by reducing the denominator in the calculation, the key question remains whether this capital allocation decision delivers better long-term value than alternative uses such as product development, marketing expansion, or strategic acquisitions in the competitive payments space. The answer will largely depend on whether management's apparent view that Expensify shares are undervalued proves correct.

Corporate Strategy Expert

Expensify's $50 million share repurchase program signals a significant strategic pivot that reveals much about management's assessment of their business trajectory and capital allocation priorities. This buyback authorization – representing nearly 20% of the company's $277.6 million market cap – demonstrates remarkable confidence in their valuation but simultaneously raises questions about their growth outlook.

This move follows a broader pattern emerging across the fintech sector, where companies are shifting from aggressive growth strategies toward capital return and profitability amid higher interest rates and more discerning capital markets. For Expensify specifically, prioritizing buybacks over reinvestment suggests management may see high-ROI opportunities within their core business – potentially concerning in the highly competitive expense management space where they face pressure from larger enterprise players and nimble startups alike.

The company's transition to debt-free status coupled with improved free cash flow from cost-cutting measures creates a solid foundation for this capital return strategy. However, investors should carefully consider whether these cost reductions might hamper Expensify's competitive positioning or innovation capacity in a rapidly evolving payments landscape.

The three-year program duration through 2028 provides substantial flexibility, but the opportunity cost warrants scrutiny. These funds could alternatively support product expansion, enter adjacent markets, or build strategic partnerships to enhance their competitive moat – options that might deliver greater long-term value than financial engineering through share count reduction.

While the buyback may provide near-term price support and signal management's belief in undervaluation, the key strategic question remains whether Expensify is positioning itself as a mature cash-generating business or whether this represents a temporary capital allocation decision while they reassess growth opportunities in a challenging market environment.

The program authorizes up to $50 million of Class A common stock to be repurchased.

PORTLAND, Ore.--(BUSINESS WIRE)-- Expensify, Inc. (Nasdaq: EXFY), a payments superapp that helps individuals and businesses around the world simplify the way they manage money across expenses, corporate cards and bills, today announced that its Board of Directors approved a new share repurchase program with authorization to purchase up to $50 million of shares of its Class A common stock. The program replaces the company’s share repurchase program that was approved in 2022, which was set to expire in March 2025.

“Given the success of this past year’s cost cutting measures and the resulting large increase in free cash flow, we believe there is an attractive potential buying opportunity for our stock. We became debt free last year, so buybacks are part of the next logical avenue to utilize our free cash flow to return value to our shareholders.” said Expensify CFO, Ryan Schaffer.

The new share repurchase program is designed to return value to shareholders by offsetting dilution from stock issuances and reducing share count over time. Expensify may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, restrictions under the terms of our loan agreements and other considerations. This program terminates on March 31, 2028, may be suspended or discontinued at any time and does not obligate the company to acquire any amount of Class A common stock.

Forward-Looking Statements

Forward-looking statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our intended share repurchases and expected shareholder benefits of the program. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “ambition,” “objective,” “seeks,” “outlook,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the impact on inflation on us and our members; our borrowing costs have and may continue to increase as a result of increases in interest rates; our expectations regarding our financial performance and future operating performance; our ability to attract and retain members, expand usage of our platform, sell subscriptions to our platform and convert individuals and organizations into paying customers; the timing and success of new features, integrations, capabilities and enhancements by us, or by competitors to their products, or any other changes in the competitive landscape of our market; the amount and timing of operating expenses and capital expenditures that we may incur to maintain and expand our business and operations to remain competitive; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our ability to make required payments under and to comply with the various requirements of our current and future indebtedness; our cash flows, the prevailing stock prices, general economic and market conditions and other considerations that could affect the specific timing, price and size of repurchases under our stock repurchase program or our ability to fund any stock repurchases; geopolitical tensions, including the war in Ukraine and the conflict in Israel, Gaza and surrounding areas; our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates; the expenses associated with being a public company; the size of our addressable markets, market share and market trends; anticipated trends, developments and challenges in our industry, business and the highly competitive markets in which we operate; any adverse impact on our business operations as a result of using artificial intelligence or other machine learning technologies in our services; our expectations regarding our income tax liabilities and the adequacy of our reserves; our ability to effectively manage our growth and expand our infrastructure and maintain our corporate culture; our ability to identify, recruit and retain skilled personnel, including key members of senior management; the safety, affordability and convenience of our platform and our offerings; our ability to successfully defend litigation brought against us; our ability to successfully identify, manage and integrate any existing and potential acquisitions of businesses, talent, technologies or intellectual property; general economic conditions in either domestic or international markets, and geopolitical uncertainty and instability, and their effects on software spending; our protections against security breaches, technical difficulties, or interruptions to our platform; our ability to maintain, protect and enhance our intellectual property; and other risks discussed in our filings with the Securities and Exchange Commission. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

About Expensify

Expensify helps 15 million people worldwide track expenses, book travel, reimburse employees, manage corporate cards, send invoices, and pay bills—all in one place. Whether you're self-employed, running a small business, managing a team, or overseeing global finances, let Expensify handle your travel and expense, at the speed of chat.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227992846/en/

Nick Tooker

Head of Investor Relations

Investors@expensify.com

Source: Expensify, Inc.

FAQ

How much is Expensify's new share buyback program worth?

Expensify's new share buyback program authorizes up to $50 million of Class A common stock repurchases.

When does Expensify's new stock repurchase program expire?

The new share repurchase program terminates on March 31, 2028.

What is the main purpose of EXFY's 2024 share repurchase program?

The program aims to return value to shareholders by offsetting dilution from stock issuances and reducing share count over time.

What financial milestone did Expensify achieve before launching this buyback?

Expensify became debt-free last year before initiating this new buyback program.

How will EXFY execute its $50 million share repurchase program?

Expensify may repurchase shares through open market purchases, private transactions, or other means, including Rule 10b5-1 trading plans.