Expensify Pays Down All Debt and Announces Share Repurchase

Rhea-AI Summary

Expensify (Nasdaq: EXFY) has made significant financial moves, demonstrating improved business health. The company has paid off all its debts, including a $15 million revolving line of credit and a $7.6 million mortgage on its Portland headquarters. Additionally, Expensify repurchased 645,938 shares of its Class A common stock at an average price of $2.34 per share.

CFO Ryan Schaffer highlighted the company's progress, citing positive cash flows for the past two quarters and the completion of a multi-year product revamp. The share repurchase program aims to offset dilution and reduce share count over time. Expensify retains access to a $24 million revolving credit line if needed, positioning itself for future growth and product development.

Positive

• Paid off all debts totaling $22.6 million, improving financial stability
• Repurchased 645,938 shares at $2.34 average price, potentially increasing shareholder value
• Returned to positive cash flows for the past two quarters
• Retained access to $24 million revolving credit line for future needs
• Nearing completion of multi-year product revamp, indicating potential for new market offerings

Negative

• Significant cash outlay for debt repayment and share repurchase may impact short-term liquidity
• Average share repurchase price of $2.34 suggests low stock valuation

Insights

Financial Analyst

Expensify's debt clearance and share repurchase are positive financial moves, signaling improved cash flow and confidence in the company's future. Paying off the $22.6 million in debt, including the $15 million credit line and $7.6 million mortgage, strengthens the balance sheet and reduces interest expenses. The share buyback of 645,938 shares at $2.34 per share demonstrates a commitment to shareholder value. However, the low share price suggests market skepticism. The retained $24 million credit line provides financial flexibility. These actions, coupled with positive cash flow in recent quarters, indicate a turnaround from previous challenges. The CFO's statement about the product revamp nearing completion hints at potential future growth. Investors should monitor upcoming product launches and their impact on revenue.

Tech Expert

Expensify's financial moves reflect a strategic shift in their business model. The mention of a "multi-year product revamp journey" nearing completion is particularly intriguing. This suggests significant changes to their "payments superapp," potentially incorporating new technologies or features to enhance their competitive edge. The focus on simplifying money management across expenses, corporate cards and bills indicates a trend towards integrated financial solutions. However, the success of this revamp will depend on user adoption and how well it addresses market needs. The positive cash flow mentioned by the CFO could be an early indicator of the revamp's success, but investors should watch for concrete metrics on user growth and engagement in upcoming reports to validate this turnaround.

Market Research Analyst

Expensify's actions reflect broader trends in the fintech sector. The company's focus on becoming a "payments superapp" aligns with the industry's move towards all-in-one financial platforms. The debt clearance and share repurchase, despite a low stock price of $2.34, suggest management's confidence in their strategy. However, this price also indicates market skepticism, possibly due to intense competition in the fintech space. The company's cost-cutting efforts and return to positive cash flow are positive signs, but the real test will be the reception of their revamped product. The fintech market is rapidly evolving and Expensify's success will depend on how well their new offerings differentiate from competitors and meet evolving customer needs. Investors should closely monitor user acquisition costs and retention rates following the product launch.

The company announced it has paid off all debts ($22.6 million) and completed a buyback of 645,938 shares.

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, announced today that the company paid down the balance of its revolving line of credit ($15 million), paid off the mortgage on its headquarters in downtown Portland, OR, ($7.6 million) and repurchased 645,938 shares of its Class A common stock from its founder.

The company still retains access to $24 million in a revolving line of credit if needed, but has otherwise cleared the debt from its balance sheets. Additionally, rather than refinance its mortgage which was scheduled to come due in the third quarter of 2024, the company has paid it off.

The 645,938 Class A common stock shares were purchased at an average price of $2.34, reflecting the weighted average price over a three-day period ending August 27, 2024. The shares will be retired. The Company’s share repurchases are designed to offset dilution from stock issuances and reduce share count over time.

Expensify CFO, Ryan Schaffer, said, “We are happy with the continued progress our business has made since this time last year. The cost cutting efforts we initiated have had a great impact on the health of our business. The end of our multi-year product revamp journey is within sight, we returned to positive cash flows for the past two quarters, we’ve eliminated our debt, and continued to repurchase shares. We are excited for the future of the company and the product we’re bringing to market.”

Please see the company’s 8-K disclosures at our investor website for more information on these transactions: https://investors.expensify.com/

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; expected funding through cash generated from operations; and our expected future free cash flow generation and credit facility restrictions. 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,” “objective,” “seeks,” 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: 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 and permit future share buybacks; our ability to make required payments under and to comply with the various requirements of our current and future indebtedness; our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates; the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic; the war in Ukraine and escalating geopolitical tensions as a result of Russia's invasion of Ukraine; the increased 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; 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, including the societal and economic impact of the COVID-19 pandemic, and geopolitical uncertainty and instability; 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 SEC. 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 more than 15 million people around the world track expenses, reimburse employees, manage corporate cards, send invoices, pay bills, and book travel. All in one app. So whether you're working for yourself, running a small business, managing a team, or overseeing the finances of a global enterprise, let Expensify handle your spend so you can stay focused on success.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240909647375/en/

Nick Tooker, investors@expensify.com

Source: Expensify, Inc.

FAQ

How much debt did Expensify (EXFY) pay off in 2024?

Expensify paid off $22.6 million in total debt, including a $15 million revolving line of credit and a $7.6 million mortgage on its Portland headquarters.

How many shares did Expensify (EXFY) repurchase and at what price?

Expensify repurchased 645,938 shares of its Class A common stock at an average price of $2.34 per share.

What is the purpose of Expensify's (EXFY) share repurchase program?

Expensify's share repurchase program is designed to offset dilution from stock issuances and reduce share count over time, potentially increasing shareholder value.

Has Expensify (EXFY) been cash flow positive recently?

Yes, according to the CFO, Expensify has returned to positive cash flows for the past two quarters.