Expensify, Inc. EXFY Form 10-Q filing Q2 FY2026

Condensed Consolidated Statements of Operations 6

Condensed Consolidated Statements of Changes in Stockholders’ Equity 7

Condensed Consolidated Statements of Cash Flows 11

Notes to Condensed Consolidated Financial Statements 13

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 29

Item 3. Quantitative and Qualitative Disclosures About Market Risk 43

Item 4. Controls and Procedures 44

Part II - Other Information

Item 1. Legal Proceedings 45

Item 1A. Risk Factors 46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 47

Item 3. Defaults Upon Senior Securities 47

Item 4. Mine Safety Disclosures 47

Item 5. Other Information 47

Item 1. Condensed Consolidated Financial Statements

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 1 – GENERAL INFORMATION

Description of the Business

Expensify, Inc. ("Expensify") was incorporated in Delaware on April 29, 2009. Expensify offers a comprehensive expense management platform that integrates with a variety of third-party accounting applications, including QuickBooks Desktop, QuickBooks Online, Xero, NetSuite, Intacct, Sage, Microsoft Dynamics, MYOB and others. Expensify's product simplifies the way that employees and vendors manage and submit expense receipts and bills and provides efficiencies to companies for the payment of those bills. Expensify delivers its services over the internet to corporations and individuals under license arrangements and offers unique pricing options for small and medium-sized businesses and enterprises primarily on a per-active-member basis. Expensify has subsidiaries in the United States ("U.S."), Australia, Canada, Netherlands and the United Kingdom ("UK").

Expensify also offers an Expensify charge card (the "Expensify Card"), which is primarily distributed to corporate customers in the U.S. who subsequently distribute the card to their employees for business use. The Expensify Card allows customers to have real-time control over their employees' spending and compliance with spending limits in addition to eReceipt reporting on purchases.

Notice of Delisting

On April 17, 2026, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s Class A common stock had been below the minimum $1.00 per share required for continued listing on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).

On May 28, 2026, the Company was notified by Nasdaq that it had regained compliance with the Minimum Bid Price Requirement and that Nasdaq considers this matter closed.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Expensify, its wholly-owned subsidiaries, and Expensify.org (collectively, the "Company") and have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim reporting in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been condensed or omitted pursuant to such SEC rules. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report").

All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments that are necessary for the fair presentation of the Company's financial position, results of operations, equity, and cash flows for the periods presented.

Results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other future annual or interim period.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and judgments are based on historical experience, forecasted events and various other assumptions that the Company believes to be reasonable under the circumstances. Estimates and judgments are evaluated on an ongoing basis. Actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

Estimates and assumptions by management affect the Company’s classification of employee and employee-related expenses, the useful lives and recoverability of long-lived assets, income taxes, capitalization of internal-use software costs, and stock-based compensation.

Updates to Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 2 of the 2025 Annual Report. Since the date the 2025 Annual Report was filed with the SEC, other than the updates made below to Settlement Assets, Net and Liabilities and Allowance for Expected Credit Losses, there have been no material changes to the Company's significant accounting policies, including the adoption status of recent accounting pronouncements.

Settlement Assets, Net and Liabilities and Allowance for Expected Credit Losses

Upon an approved request for expense reimbursement from customers, the Company initiates a transaction facilitated by a third-party vendor to collect funds from customers that are deposited into a commercial bank account held by the Company for the benefit of the customers until remitted to the customer’s members after a clearing period of up to three business days. The Company records a settlement receivable upon approval of the expense reimbursement until funds are cleared in the Company’s commercial bank account. A corresponding liability is recorded upon approval of the expense reimbursement until funds are remitted from the Company’s commercial bank account to the customer’s members. Changes in settlement receivables and liabilities for expense reimbursements are presented as financing activities as the Change in customer funds, net on the Condensed Consolidated Statements of Cash Flows based on the nature of the activity underlying the Company’s customer accounts.

For customer transactions incurred through the Expensify Card, the Company initiates a transaction facilitated by a third-party vendor to collect funds from customers that are deposited into a commercial bank account held by the Company. The majority of customers settle Expensify Card transactions on a daily basis while certain customers settle Expensify Card transactions on a monthly basis. The Company records a settlement receivable from customers for Expensify Card transactions until funds are cleared in the Company’s commercial bank account. A liability is recorded for Expensify Card transactions until funds are remitted to the issuing bank. Changes in settlement receivables and liabilities for customer transactions incurred through the Expensify Card are presented as operating activities on the Condensed Consolidated Statements of Cash Flows based on the nature of the activity underlying the Company’s customer accounts.

Settlement receivables are recorded net of an allowance for expected credit losses. The allowance for expected credit losses is based on the Company’s assessment of the collectability of the settlement receivables. Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends and changes in customer settlement terms.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The Company revised the consolidated statement of cash flows for 2025 starting in the first quarter of 2026 and subsequent filings for the classification of changes in reimbursement related settlement assets and liabilities. As a result of the revision, cash provided by operating activities and net cash used in financing activities increased by $2.3 million for the six months ended June 30, 2025. This revision was deemed to be immaterial to the condensed consolidated financial statements for the six months ended June 30, 2025.

NOTE 2 – REVENUE, NET AND CERTAIN STATEMENT OF OPERATIONS COMPONENTS

Disaggregation of Revenue, Net

The table below provides information about disaggregated revenue, net from customers (in thousands). No individual customer represented more than 10% of the Company’s total revenue, net during each of the three and six months ended June 30, 2026 and 2025.

The table below provides the Company's total revenue, net by geographic region based on the transaction currency (in thousands). No other individual country outside of the United States accounted for more than 10% of total revenue, net during each of the three and six months ended June 30, 2026 and 2025.

Consideration From a Vendor

Under the Expensify Card program, the Company receives consideration from a vendor for certain volume-based incentives from Visa, which are included as a reduction to Cost of revenue, net on the Condensed Consolidated Statements of Operations as earned. The amounts earned under these volume-based incentives were $0.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively. The amounts earned under these volume-based incentives were $0.5 million and $1.0 million for the six months ended June 30, 2026 and 2025, respectively.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 3 – CERTAIN BALANCE SHEET COMPONENTS

Other Current Assets

Other current assets consisted of the following (in thousands):

Capitalized Software, Net

Capitalized software, net consisted of the following (in thousands):

Amortization expense related to capitalized software development costs is recorded in Cost of revenue, net on the Condensed Consolidated Statements of Operations. Amortization expense was $2.2 million and $1.9 million for the three months ended June 30, 2026 and 2025, respectively. Amortization expense was $4.2 million and $3.7 million for the six months ended June 30, 2026 and 2025, respectively.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense related to property and equipment is recorded in General and administrative, Sales and marketing, and Other income, net on the Condensed Consolidated Statements of Operations. Depreciation expense related to property and equipment was $0.2 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively. Depreciation expense was $0.3 million for each of the six months ended June 30, 2026 and 2025.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Loan and Security Agreement

In February 2024, the Company entered into a Second Amended and Restated Loan and Security Agreement (as subsequently amended, the "2024 Amended Loan and Security Agreement") with Canadian Imperial Bank of Commerce (“CIBC”). The 2024 Amended Loan and Security Agreement provided for a $25.0 million revolving credit facility, which was terminated in July 2025. At the time of such termination, the Company had no borrowings under the revolving credit facility, and certain terms of the 2024 Amended Loan and Security Agreement, including collateral security, survived the termination with respect to outstanding Contingent Obligations (as defined in the 2024 Amended Loan and Security Agreement) arising from Bank Services (as defined in the 2024 Amended Loan and Security Agreement). There were no penalties incurred by the Company as a result of the termination of the revolving credit facility.

In April 2024, the Company 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 Expensify Card program. The Letter of Credit was issued in the amount of $1.0 million for the benefit of The Bancorp Bank, N.A. In April 2025, the Company entered into an amendment to the irrevocable standby letter of credit to increase the Letter of Credit to $7.5 million. The Letter of Credit remained outstanding following the termination of the revolving credit facility.

Letter of Credit Security Agreement

In October 2025, the Company entered into a Letter of Credit Facility and Security Agreement (the “LOC Security Agreement”) with CIBC. The LOC Security Agreement, among other things, provides for the issuance of additional irrevocable standby letters of credit, governs the terms of the outstanding Letter of Credit originally issued under the 2024 Amended Loan and Security Agreement, grants to CIBC, for the ratable benefit of the lenders, a security interest in substantially all of the assets of the Company and its subsidiaries, and also replaces the 2024 Amended Loan and Security Agreement with respect to the Contingent Obligations (as defined in the LOC Security Agreement). Under the LOC Security Agreement, the Letter of Credit remained at $7.5 million and expires in March 2027. The Letter of Credit automatically renews for successive one-year periods unless the Company or the issuing bank provide notice of non-renewal prior to the expiration date. No amounts had been drawn on the Letter of Credit as of June 30, 2026.

Legal

From time to time in the normal course of business, the Company may be involved in claims, proceedings and litigation. In the case of any litigation, the Company records a provision for a liability when management believes that it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. The Company reviews such provisions at least quarterly and adjusts such provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case.

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 the Company, the Company's executive officers and several of the Company's current and former directors as defendants (collectively, the “Defendants”). The lawsuit was purportedly brought on behalf of all those who purchased or acquired the Company's stock pursuant or traceable to its initial public offering ("IPO"). The complaint alleged 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 the IPO. The lawsuit sought unspecified damages and other relief. On December 17, 2025, after conducting mediation within the discovery phase of the lawsuit, the parties reached an agreement-

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

in-principle to settle all claims in the Putative Class Action for an aggregate sum of $9.5 million. Plaintiff filed a stipulation of settlement and motion for preliminary approval of settlement on February 12, 2026. On February 23, 2026, the Court granted preliminary approval of the settlement. On April 28, 2026, Plaintiff filed a motion for final approval of the settlement, as well as a motion for attorneys' fees. A hearing for the final approval of the settlement was held on June 30, 2026, at which time final approval was granted by the Court. During the six months ended June 30, 2026, the Company deposited $9.5 million into escrow for the settlement, which consisted of $2.6 million paid by the Company and $6.9 million recovered under the Company's applicable insurance policies.

During the year ended December 31, 2025 and in the first quarter of 2026, shareholder derivative lawsuits were filed in the United States District Court for the District of Oregon naming the Company as nominal defendant, with the Company's executive officers and several of the Company's current and former directors as defendants (collectively, the “Derivative Defendants”). The Derivative Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the shareholder derivative lawsuits. At this time, the Company is unable to estimate the probability or the amount of liability, if any, related to these matters. The Company expects all future settlements related to these matters, if any, to be covered entirely by the applicable insurance policies carried by the Company. See Part II, Item 1. "Legal Proceedings" for further details.

As of June 30, 2026, there were no other legal contingency matters, either individually or in aggregate, that would have a material adverse effect on the Company’s financial position, results of operations or cash flows.

NOTE 5 – STOCK INCENTIVE PLANS

2009 and 2019 Stock Plans

In 2009, the Board of Directors approved the 2009 Stock Plan ("2009 Stock Plan"). As amended in 2015, the 2009 Stock Plan permitted the Company to grant up to 16,495,150 shares of common stock. In January 2018, the Company increased the number of shares of common stock reserved under the 2009 Stock Plan by 535,130 shares to 17,030,280 shares. In April 2019, the Board of Directors approved the adoption of the 2019 Stock Plan ("2019 Stock Plan", and together with the 2009 Stock Plan, "Stock Plans"). The 2019 Stock Plan permitted the Company to grant up to 8,173,970 additional shares, increasing the overall common stock reserved for grant under the Stock Plans to 25,204,250 shares. On November 9, 2021, the Board of Directors amended and restated the 2019 Stock Plan to, among other things, increase the common stock reserved for issuance under the 2019 Stock Plan to an aggregate of 16,856,770 shares of Class A common stock and LT50 common stock.

The Stock Plans will continue to govern the terms and conditions of the outstanding awards granted under them. Upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan, an equal number of shares of Class A common stock will become available for grant under the 2021 Incentive Award Plan ("2021 Plan") and the Company's 2021 Stock Purchase and Matching Plan ("Matching Plan" and together with the 2021 Plan, "2021 Incentive Plans").

2021 Incentive Plans

In November 2021, the Board of Directors adopted, and the Company's stockholders approved, the 2021 Incentive Plans, which both became effective immediately before the effectiveness of the Company's IPO Registration Statement on Form S-1 and use a combined share reserve. Under the 2021 Incentive Plans, 11,676,932 shares of Class A common stock were initially reserved for issuance pursuant to a variety of stock-based awards, including incentive stock options, nonqualified stock options, stock appreciation

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

rights, restricted stock awards, restricted stock units ("RSUs"), and other forms of equity and cash compensation under the 2021 Plan and purchase rights and matching awards under the Matching Plan. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2021 Incentive Plans will be increased upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A common stock or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan. The number of shares of Class A common stock reserved and available for issuance under the 2021 Incentive Plans as of June 30, 2026 and December 31, 2025 was 21,382,386 shares and 20,992,688 shares, respectively. The number of shares reserved for issuance under the 2021 Incentive Plans will automatically increase each subsequent January 1 through January 1, 2031, by the lesser of (A) 6% of the aggregate number of shares of all classes of common stock outstanding on the last day of the immediately preceding calendar year, or (B) such lesser number of shares as determined by the Company’s Board of Directors or compensation committee; provided, however, that no more than 87,576,990 shares of Class A common stock may be issued upon the exercise of incentive stock options.

Stock Purchase and Matching Plan

The Matching Plan operates using consecutive three-month offering periods that commenced on March 15, 2022. Employees, consultants and directors (collectively, "Service Providers") of the Company can participate in the Matching Plan by electing to contribute compensation through deductions from payroll or fee payments, or by receiving discretionary awards under the plan. On the last day of the offering period, the contributions made during the offering period are used to purchase shares of Class A common stock.

The price at which Class A common stock is purchased under the Matching Plan equals the average of the high and low trading price of one share of Class A common stock as of the last trading day of the offering period. At the end of each offering period, the Company may provide a discretionary match up to 1/10 of a share of Class A common stock for each share of Class A common stock purchased by or issued to a Service Provider under the Matching Plan that is retained through the end of the applicable offering period. No fractional shares will be issued by the Company. The Company will round to the nearest full share for shares purchased or matched shares issued to a Service Provider under the Matching Plan. The match rate applicable to each offering period shall be limited to 1.5% of the shares of any class of capital stock outstanding as of the exercise date applicable to such offering period. The Company estimates the fair value of matched shares provided under the Matching Plan using the closing price of the Company's Class A common stock on the Nasdaq Stock Market LLC on the date of grant. The Company recognizes stock-based compensation expense related to the matched shares pursuant to its Matching Plan on a straight-line basis over the applicable three-month offering period.

Service Providers who participated in the Matching Plan for the offering period ended June 14, 2026 purchased a total of 1,145,672 shares of Class A common stock, based on a purchase price of $1.27, resulting in gross cash proceeds to the Company of $1.5 million.

Service Providers who participated in the Matching Plan for the offering period ended June 14, 2025 purchased a total of 636,759 shares of Class A common stock, based on a purchase price of $2.29, resulting in gross cash proceeds to the Company of $1.5 million.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

For the offering period ended June 14, 2026, the Company elected to match each share of Class A common stock purchased or issued under the Matching Plan with 1/20 of a share of Class A common stock. During the three and six months ended June 30, 2026, the Company granted 475,319 and 927,824 shares of Class A common stock under the Matching Plan, respectively.

For the offering period ended June 14, 2025, the Company elected to match each share of Class A common stock purchased or issued under the Matching Plan with 1/20 of a share of Class A common stock. During the three and six months ended June 30, 2025, the Company granted 251,964 and 470,468 shares of Class A common stock under the Matching Plan, respectively.

The Company has made discretionary contributions under the Matching Plan to eligible Service Providers. The Company did not make any discretionary contributions under the Matching Plan to eligible Service Providers during both the three and six months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company granted 65,535 and 243,734 shares of Class A common stock as discretionary contributions under the Matching Plan, respectively.

Restricted Stock Units

Equity-Classified Awards

Pursuant to the Company's Non-Employee Director Compensation Program, which was adopted under the 2021 Incentive Plans, the Company granted 371,286 Class A common stock RSUs during the six months ended June 30, 2026. A total of 153,690 Class A common stock RSUs vested during the six months ended June 30, 2026 related to previously-granted RSU awards, as the service conditions were satisfied.

During the six months ended June 30, 2026, equity-classified RSU activity was as follows:

As of June 30, 2026, the Company had $57.9 million of unrecognized stock-based compensation expense related to unvested equity-classified RSUs, which is expected to be recognized over the remaining weighted average life of 3.09 years.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Liability-Classified Awards

On June 20, 2025, pursuant to the 2021 Incentive Plans, the Company's compensation committee approved and authorized the grant of Class A common stock RSUs to certain Service Providers, to be issued on a quarterly basis through March 2029. Issuances of the Class A common stock RSUs occur automatically each quarter using a predetermined fixed dollar amount that gradually decreases over time. Each RSU vests immediately on the date it is issued, and both the issuance and vesting are subject to a service condition that will ultimately be satisfied over four years. The first quarterly automatic issuance occurred on June 20, 2025 and the remaining RSUs will be subject to quarterly issuance and vesting thereon until fully issued. The number of RSUs to be automatically issued on each issuance date is determined based on the closing price of the Company's Class A common stock on the Nasdaq Stock Market LLC on the 15th calendar day of the month during which the RSU award is issued, or the immediately preceding trading day. The awards are accounted for as liability awards and will be recognized on a straight-line basis over the life of the awards.

The Company issued 728,589 Class A common stock RSUs and settled liability-classified awards with a fair value of $0.7 million during the six months ended June 30, 2026.

The Company issued 144,820 Class A common stock RSUs and settled liability-classified awards with a fair value of $0.3 million during the six months ended June 30, 2025.

As of June 30, 2026, the Company had $1.9 million of unrecognized stock-based compensation expense related to unvested liability-classified RSUs, which is expected to be recognized over the remaining weighted average life of 1.06 years.

Stock Options

The Stock Plans and the 2021 Plan provide for the grant of incentive and nonstatutory stock options to Service Providers. Under the Stock Plans and the 2021 Plan, the exercise price of incentive stock options must be equal to at least 110% of the fair market value of the common stock on the grant date for a “ten-percent holder” or 100% of the fair market value of the common stock on the grant date for any other participant. The exercise price of nonstatutory options granted must be equal to at least 100% of the fair market value of the Company’s common stock on the date of grant. Options are exercisable over periods not to exceed ten years from the date of grant (five years for incentive stock options granted to a "ten-percent holder").

Options typically vest over four years and are exercisable at any time after the grant date, provided that Service Providers exercising unvested options receive restricted common stock that is subject to repurchase at the original exercise price upon termination of service. The repurchase right lapses in accordance with the vesting schedule of the exercised option.

On June 23, 2026, pursuant to the 2021 Plan, the Company's Board of Directors approved and authorized the grant of incentive and nonqualified stock options to the Company's named executive officers and certain directors of the Company. The options granted vest ratably on a quarterly basis over four years subject to the Service Provider's continued service through each vesting date. All options granted had a vest commencement date of April 13, 2025. On the grant date, the Company recorded a cumulative one-time stock-based compensation expense of $1.6 million for the requisite service period satisfied by the Service Providers prior to that date. The Company will recognize the remaining stock-based compensation expense on a straight-line basis over the remaining vesting period.

During the six months ended June 30, 2026, the Company granted 5,580,464 options to Service Providers under the 2021 Plan.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The fair value of options granted during the six months ended June 30, 2026 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

(1) The Company has no history or expectation of paying cash dividends on its common stock.

(2) The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.

(3) Expected volatility is based on the historical volatility of the Company’s Class A common stock and peer group comparisons over the expected life of the options.

(4) The expected life of options to Service Providers with a demonstrated exercise history of holding options to maturity is based on the contractual term of the options. For all other options, the Company determined the expected life based on the average of the time-to-vesting and the contractual life of the stock-based awards.

A summary of the Company's stock option activity during the six months ended June 30, 2026 was as follows:

The total pretax intrinsic value of options outstanding and exercisable at June 30, 2026 was $2.2 million. The intrinsic value is the difference between the closing price of the Company's common stock on the date of exercise and the exercise price for in-the-money options. The intrinsic value of options outstanding and exercisable is based on the closing price of the Company's common stock as of June 30, 2026. The weighted average grant date fair value of options granted during the six months ended June 30, 2026 was $1.17.

As of June 30, 2026, the Company had $4.7 million of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 2.78 years.

Cash received from the purchase of shares upon the exercise of stock options under the Stock Plans for the six months ended June 30, 2026 and 2025 was immaterial and $0.1 million, respectively.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Stock-Based Compensation

The following table summarizes the stock-based compensation expense recognized for awards granted under the Company's authorized stock incentive plans (in thousands):

Stock-based compensation expense is allocated based on the cost center to which the award holder spent time during the reported periods. Stock-based compensation expense is included in the following components of expenses on the Condensed Consolidated Statements of Operations (in thousands):

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 6 – INCOME TAXES

For the three and six months ended June 30, 2026, the Company prepared its interim tax provision by applying a year-to-date effective tax rate, which the Company believes results in the best estimate of the annual effective tax rate.

The Company recorded a (provision for) benefit from income taxes of $(1.1) million and $0.7 million for the three months ended June 30, 2026 and 2025, respectively, which resulted in effective tax rates of (41.6)% and 7.0%, respectively.

The Company recorded a provision for income taxes of $1.7 million and $1.3 million for the six months ended June 30, 2026 and 2025, respectively, which resulted in effective tax rates of (36.9)% and (12.7)%, respectively.

The effective income tax rate differs from the statutory tax rate in 2026 and 2025 primarily due to non-deductible stock-based compensation and the change in the valuation allowance in 2025.

The amount of cash paid for income taxes, net of refunds received, was $1.5 million and $4.4 million for the six months ended June 30, 2026 and 2025, respectively.

The Company follows the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of uncertain tax positions that have been taken or expected to be taken on a tax return. As of June 30, 2026 and December 31, 2025, the Company recorded an uncertain tax position liability of $1.8 million and $1.6 million, respectively, within Other liabilities on the Condensed Consolidated Balance Sheets. This liability includes $0.4 million and $0.3 million of interest and penalties as of June 30, 2026 and December 31, 2025, respectively.

H.R.1, enacted into law on July 4, 2025, introduced provisions that modified the Internal Revenue Code (“IRC”), including the immediate expensing of domestic research and development expenditures for tax purposes. As previously required under the Tax Cuts and Jobs Act, the Company capitalized and amortized research and experimental (“R&D”) expenditures under IRC Section 174 for tax years beginning after December 31, 2021. With the enactment of H.R.1 in 2025, the Company began deducting domestic Section 174 costs in the year they were incurred. The Company will continue to capitalize and amortize R&D costs over 15 years for R&D performed outside of the U.S.

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 7 – NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The rights, including the liquidation and dividend rights, of the holders of Class A, LT10 and LT50 common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote per share, each share of LT10 common stock is entitled to ten votes per share and each share of LT50 common stock is entitled to 50 votes per share. Each share of LT10 and LT50 common stock is convertible into one share of Class A common stock voluntarily at the option of the holder after the satisfaction of certain requirements, which include a ten-month notice period for LT10 common stock and a 50-month notice period for LT50 common stock to convert into Class A common stock, or automatically upon certain events. The Class A common stock has no conversion rights. As the liquidation and dividend rights are identical for Class A, LT10 and LT50 common stock, the undistributed earnings are allocated on a proportional basis based on the number of weighted average shares within each class of common stock during the period and the resulting net loss per share will be the same for the Class A, LT10 and LT50 common stock on an individual or combined basis.

The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:

Expensify, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

NOTE 8 – EQUITY

Share Repurchase Program

On February 25, 2025, the Executive Committee approved a 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"). Under the 2025 Share Repurchase Program, the Company 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 of the Exchange Act, in accordance with applicable securities laws and other restrictions. 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 the Company's current and future debt agreements and other considerations. The 2025 Share Repurchase Program does not obligate the Company to acquire any particular amount of Class A common stock, and the program may be suspended or terminated by the Company at any time at its discretion without prior notice.

During the three and six months ended June 30, 2026, the Company repurchased 712,017 shares of Class A common stock under the 2025 Share Repurchase Program, at a total cost to the Company of $1.2 million.

During the three and six months ended June 30, 2025, the Company repurchased 1,285,336 shares of Class A common stock under the 2025 Share Repurchase Program, at a total cost to the Company of $3.0 million.

As of June 30, 2026, the Company had approximately $39.8 million remaining under the 2025 Share Repurchase Program, not including amounts used for net share settlement of vested equity incentive awards.

Tender Offer

On May 13, 2026, the Company announced the commencement of a modified “Dutch auction” tender offer to purchase shares of its Class A common stock for an aggregate purchase price of up to $25.0 million at a price per share of not less than $0.98 and not more than $1.20 (the “Tender Offer”). The Tender Offer was not conditioned upon any minimum number of shares being tendered and was not subject to a financing condition. The Tender Offer expired on June 10, 2026. The Company accepted 6,053,023 shares for purchase at the purchase price of $1.20 per share, for a total cost of $8.0 million, including $0.7 million of fees and expenses related to the Tender Offer.

NOTE 9 – SEGMENT REPORTING

The Company operates as one reportable segment because its chief operating decision maker ("CODM"), a committee that consists of the chief executive officer, the chief financial officer, and the chief strategy officer, reviews the Company’s financial information on a consolidated basis for purposes of making decisions regarding allocating resources and assessing performance. Accordingly, the CODM uses Net loss on a consolidated basis to measure segment profit or loss and reviews significant segment expenses on a consolidated basis to manage the Company's operations, which includes Cost of revenue, net, Research and development, General and administrative, and Sales and marketing. All significant segment expenses are presented on the Condensed Consolidated Statements of Operations. Interest income is recorded within Other income, net on the Condensed Consolidated Statements of Operations. Interest income was $0.4 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. Interest income was $0.9 million during each of the six months ended June 30, 2026 and 2025. The measure of segment assets is Total assets as reported on the Condensed Consolidated Balance Sheets. Substantially all long-lived assets are located in the United States.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report"). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A. "Risk Factors" in our 2025 Annual Report and included elsewhere in this Quarterly Report on Form 10-Q. See "Special Note Regarding Forward-Looking Statements."

OVERVIEW

Expensify is a leading cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. Every day, people from all walks of life in organizations around the world use Expensify to scan and reimburse receipts from flights, hotels, coffee shops, office supplies and ride shares. Since our founding in 2008, we have added over 15 million members to our community and processed and automated 1.9 billion expense transactions on our platform as of June 30, 2026, freeing people to spend less time managing expenses and more time doing the things they love. For the quarter ended June 30, 2026, an average of 640,000 paid members across an average of 45,700 companies and over 200 countries and territories used Expensify to make money easy.

MACROECONOMIC TRENDS

Our business and the operations of our customers, the majority of which are small and medium-sized businesses, 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. The economy continues to be impacted by elevated inflation rates and faces further inflation risk. Tariff and trade issues, as well as geopolitical uncertainty and instability, including the conflict in the Middle East, also continue to cause overall uncertainty with respect to the economy. See Part I, Item 1A. "Risk Factors" in our 2025 Annual Report and our subsequent filings for further discussion of the possible impact of such macroeconomic trends on our business. Additionally, other potential challenging macroeconomic conditions, and the resulting impact on business continuity and travel, could negatively impact our business.

Components of Results of Operations

Revenue, Net

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. Annual subscription customers who wish to terminate their contracts before the end of the term are required to pay the remaining obligation in full plus any fees or penalties set forth in the agreement. We charge our customers subscription fees for access to our platform based on the number of monthly active members and level of service. The contractual price is based on either negotiated fees or rates published on our website. We generate most of our revenue from customers who have a credit card or debit card on file with us that is automatically charged each month. Virtually all of our customers have a standard terms of service contract, with the few exceptions for customers on bespoke service contracts.

Our contracts with our customers include two performance obligations: access to the hosted software service, inclusive of all features available within the platform, and the related customer support. We account for the platform access and the support as a combined performance obligation because they have the same pattern of transfer over the same period and are therefore delivered concurrently. We satisfy our performance obligation over time each month as we provide platform access and support services to customers and as such recognize revenue over time. We recognize revenue net of applicable taxes imposed on the related transaction. Revenue earned from subscription fees was $30.8 million and $32.9 million for the three months ended June 30, 2026 and 2025, respectively. Revenue earned from subscription fees was $61.7 million and $66.1 million for the six months ended June 30, 2026 and 2025, respectively.

We also offer an Expensify charge card (the "Expensify Card"), which 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.

Under the Expensify 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, net on the Condensed Consolidated Statements of Operations. Interchange revenue was $5.9 million and $5.3 million for the three months ended June 30, 2026 and 2025, respectively. Interchange revenue was $11.5 million and $10.3 million for the six months ended June 30, 2026 and 2025, respectively.

We offer a cashback rewards program to all customers under the Expensify Card program based on volume of Expensify Card transactions. Cashback rewards are earned on a monthly basis and are applied against outstanding customer receivables or are paid out in the following month. We consider our cashback rewards as consideration payable to a customer, and they are recorded as contra revenue within Revenue, net on the Condensed Consolidated Statements of Operations. Cashback rewards applied against outstanding customer receivables are reflected as a reduction to Accounts receivable, net on the Condensed Consolidated Balance Sheets. Cashback rewards liability is recorded within Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. The cashback rewards fluctuate over time as customers meet eligibility requirements and based on the timing of payments made to customers. The cost of cashback rewards was $3.0 million and $2.5 million for the three months ended June 30, 2026 and 2025, respectively. The cost of cashback rewards was $5.6 million and $4.8 million for the six months ended June 30, 2026 and 2025, respectively.

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, and outsourcing costs to support customer service, net of consideration from a vendor under the Expensify Card program for certain volume-based incentives from Visa.

Under the Expensify 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 Condensed Consolidated Statements of Operations as they are earned. Amounts earned under these volume-based incentives were $0.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively. Amounts earned under these volume-based incentives were $0.5 million and $1.0 million for the six months ended June 30, 2026 and 2025, respectively.

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. We capitalize certain software development costs that are attributable to developing or adding significant functionality to our internal-use software during the application development stage of the projects. All research and development expenses, excluding capitalized software development costs, are expensed as incurred.

We believe delivering new functionality is critical to attract new customers and expand our relationships with existing customers. 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.

General and Administrative

General and administrative expenses primarily consist of personnel-related expenses, including stock-based compensation, for any employee time allocated to administrative functions, including finance and accounting, 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, and settlement losses, net of recoveries.

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.

Other Income, Net

Other income, net, consists primarily of interest income. 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 and foreign currency remeasurement.

(Provision for) Benefit from Income Taxes

Income taxes primarily consist of income taxes in the United States, United Kingdom, Australia, Netherlands and Canada, as well as states within the United States in which we do business.

On July 4, 2025, H.R.1 was enacted into law, which introduced provisions that modified the Internal Revenue Code (“IRC”), including the immediate expensing of domestic research and development expenditures for tax purposes. As previously required under the Tax Cuts and Jobs Act, we capitalized and amortized research and experimental (“R&D”) expenditures under IRC Section 174 for tax years beginning after December 31, 2021. With the enactment of H.R.1 in 2025, we began deducting domestic Section 174 costs in the year they were incurred. We will continue to capitalize and amortize R&D costs over 15 years for R&D performed outside of the U.S.

Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

The following table sets forth our results of operations for each of the periods presented (in thousands, except percentages, share and per share data):

(1) Includes stock-based compensation expense as follows (in thousands):

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025

Revenue, Net

Revenue, net decreased $1.9 million, or 5%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to (i) a decrease in billable activity across our user base, 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. This decrease was partially offset by an increase in interchange revenue driven by the adoption of the Expensify Card program.

Cost of Revenue, Net and Gross Margin

Cost of revenue, net increased $0.3 million or 2% for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in amortization expense related to capitalized software. The increase was partially offset by savings generated from the increased use of artificial intelligence ("AI") in place of human agents.

Gross margin decreased to 48% for the three months ended June 30, 2026 compared to 52% in the same period in 2025 due to the factors described in the preceding paragraphs for Revenue, Net and Cost of revenue, net.

Research and Development

Research and development expenses decreased by $0.2 million, or 3%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in internal employee time spent on project initiatives and new product features.

General and Administrative

General and administrative expenses increased $0.2 million, or 2%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in employee time spent on general and administrative activities.

Sales and Marketing

Sales and marketing expenses decreased $9.7 million, or 67%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to elevated advertising spend in 2025 related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025.

Other Income, Net

Other income, net decreased by $0.7 million, or 77%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to the net impact of period-over-period foreign currency gains and losses.

(Provision for) Benefit from Income Taxes

We recorded a provision for income taxes of $1.1 million for the three months ended June 30, 2026 compared to a benefit from income taxes of $0.7 million for the same period in 2025.

During the three months ended June 30, 2026 and 2025, our effective income tax rate was (41.6)% and 7.0%, respectively. The effective income tax rate differs from the statutory rate in 2026 primarily due to non-deductible stock-based compensation and Section 162(m) of the Internal Revenue Code compensation limitations, partially offset by the change in the valuation allowance. The effective income tax rate differs from the statutory rate in 2025 primarily due to non-deductible stock-based compensation and the change in the valuation allowance.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025

Revenue, Net

Revenue, net decreased $4.0 million, or 6%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to (i) a decrease in billable activity across our user base, 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. This decrease was partially offset by an increase in interchange revenue driven by the adoption of the Expensify Card program.

Cost of Revenue, Net and Gross Margin

Cost of revenue, net increased by $0.3 million, or 1%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in amortization expense related to capitalized software. The increase was partially offset by savings generated from the increased use of AI in place of human agents.

Gross margin decreased to 48% for the six months ended June 30, 2026 compared to 51% in the same period in 2025 due to the factors described in the preceding paragraphs for Revenue, net and Cost of revenue, net.

Research and Development

Research and development expenses decreased by $0.3 million, or 3%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in internal employee time spent in the application development stage of projects capitalized as software development costs.

General and Administrative

General and administrative expenses decreased $1.5 million, or 8%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to (i) a decrease in settlement losses, net of recoveries, and (ii) a decrease in accounting and audit fees.

Sales and Marketing

Sales and marketing expenses decreased $9.5 million, or 53%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to elevated advertising spend in 2025 related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025.

Other Income, Net

Other income, net decreased $0.8 million, or 69%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to the net impact of period-over-period foreign currency gains and losses.

Provision for Income Taxes

We recorded a provision for income taxes of $1.7 million for the six months ended June 30, 2026 compared to a provision for income taxes of $1.3 million for the same period in 2025.

During the six months ended June 30, 2026 and 2025, our effective income tax rate was (36.9)% and (12.7)%, respectively. The effective income tax rate differs from the statutory rate in 2026 and 2025 primarily due to non-deductible stock-based compensation and the change in valuation allowance in 2025.

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 June 30, 2026, we had $65.8 million in cash and cash equivalents with no outstanding indebtedness and a $7.5 million letter of credit outstanding.

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 for the foreseeable future.

CASH FLOWS

The following table summarizes our cash flows for the periods indicated (in thousands):

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash provided by operating activities was $8.6 million for the six months ended June 30, 2026 as compared to $16.0 million for the same period in 2025. The decrease is primarily due to (i) a decrease in subscription revenue, and (ii) the settlement payment related to the Putative Class Action discussed under Part II, Item 1. "Legal Proceedings" and related legal fees. This was partially offset by a decrease in advertising spend due to elevated advertising spend in 2025 related to our title sponsorship of F1® The Movie, which was released in theaters in June 2025.

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities was $2.5 million for the six months ended June 30, 2026, consisting of software development costs.

Net cash used in investing activities increased for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in employee and external contributor software development costs.

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in financing activities was $1.1 million for the six months ended June 30, 2026, primarily consisting of the repurchase and retirement of common stock primarily due to the Tender Offer and additional share repurchases described below. This was partially offset by (i) the change in customer funds, net, and (ii) proceeds from common stock purchased under the 2021 Stock Purchase and Matching Plan ("Matching Plan").

Net cash used in financing activities decreased for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to (i) the change in customer funds, net, and (ii) proceeds from common stock purchased under the Matching Plan, partially offset by the repurchase and retirement of common stock primarily due to the Tender Offer and additional share repurchases described below.

Share Repurchase Program

On February 25, 2025, the Executive Committee approved a 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"). Under 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 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. 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. 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.

As of June 30, 2026, we had $39.8 million remaining under the 2025 Share Repurchase Program, not including amounts used for net share settlement of vested equity incentive awards.

Tender Offer

On May 13, 2026, we announced the commencement of a modified “Dutch auction” tender offer to purchase shares of our Class A common stock for an aggregate purchase price of up to $25.0 million at a price per share of not less than $0.98 and not more than $1.20 (the “Tender Offer”). The Tender Offer was not conditioned upon any minimum number of shares being tendered and was not subject to a financing condition. The Tender Offer expired on June 10, 2026. We accepted 6,053,023 shares for purchase at the purchase price of $1.20 per share, for a total cost of $8.0 million, including $0.7 million of fees and expenses related to the Tender Offer.

See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information about the Share Repurchase Program and Tender Offer.

CREDIT FACILITIES

Loan and Security Agreement

In February 2024, we entered into a Second Amended and Restated Loan and Security Agreement (as subsequently amended, the "2024 Amended Loan and Security Agreement") with Canadian Imperial Bank of Commerce (“CIBC”). The 2024 Amended Loan and Security Agreement provided for a $25.0 million revolving credit facility, which was terminated in July 2025. At the time of such termination, we had no borrowings under the revolving credit facility, and certain terms of the 2024 Amended Loan and Security Agreement, including collateral security, survived the termination with respect to outstanding Contingent Obligations (as defined in the 2024 Amended Loan and Security Agreement) arising from Bank Services (as defined in the 2024 Amended Loan and Security Agreement). There were no penalties incurred by us as a result of the termination of the revolving credit facility.

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 Expensify Card program. The Letter of Credit was issued in the amount of $1.0 million for the benefit of Bancorp. In April 2025, we entered into an amendment to the irrevocable standby letter of credit to increase the Letter of Credit to $7.5 million. The Letter of Credit remained outstanding following the termination of the revolving credit facility.

Letter of Credit Security Agreement

In October 2025, we entered into a Letter of Credit Facility and Security Agreement (the “LOC Security Agreement”) with CIBC. The LOC Security Agreement, among other things, provides for the issuance of additional irrevocable standby letters of credit, governs the terms of the outstanding Letter of Credit originally issued under the 2024 Amended Loan and Security Agreement, grants to CIBC, for the ratable benefit of the lenders, a security interest in substantially all of our assets and our subsidiaries, and also replaces the 2024 Amended Loan and Security Agreement with respect to the Contingent Obligations (as defined in the LOC Security Agreement). Under the LOC Security Agreement, the Letter of Credit remained at $7.5 million and expires in March 2027. The Letter of Credit automatically renews for successive one-year periods unless we or the issuing bank provide notice of non-renewal prior to the expiration date. No amounts had been drawn on the Letter of Credit as of June 30, 2026.

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.

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. Accordingly, we believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. 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.

KEY BUSINESS METRICS

Paid Members

We believe that our ability to increase the number of paid members on our platform drives our success as a business. Our customers pay for subscriptions on behalf of employees and contractors who use the platform, whom we refer to as paid members. We define paid members as the average number of users (employees, contractors, volunteers, team members, etc.) who are billed on Collect or Control plans during any particular quarter. For small and medium businesses or sole proprietors with only one employee, the business owner may also be the only paid member.

The following table sets forth the average number of paid members for each of the periods presented (in thousands):

Three Months Ended Paid members

June 30, 2026 640

June 30, 2025 652

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. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. 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.

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.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net loss excluding provision for (benefit from) income taxes, other income, net, depreciation and amortization and stock-based compensation expense. We define adjusted EBITDA margin as adjusted EBITDA divided by revenue, net for the same period. 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.

Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Margin

We define non-GAAP net income (loss) as net loss excluding stock-based compensation expense. We define non-GAAP net income (loss) margin as non-GAAP net income (loss) divided by revenue, net for the same period. We are focused on profitable growth and we consider non-GAAP net income (loss) 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 expense, which is not considered indicative of the core operating performance of our business.

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, reduced by the purchases of property and equipment and software development costs. We define free cash flow margin as free cash flow divided by revenue, net for the same period.

Contractual Obligations and Commitments

As of June 30, 2026, there have been no material changes in our contractual obligations and commitments as disclosed in our 2025 Annual Report.

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. In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Changes in Stockholders’ Equity, or Condensed Consolidated Statements of Cash Flows.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements included elsewhere herein have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as compared to those described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report.

Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk from the disclosure included under Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2025 Annual Report.

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission ("SEC") rules and forms. Based on such evaluation, our chief executive officer and chief financial officer have concluded that as of June 30, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LIMITATIONS OF EFFECTIVENESS OF CONTROLS AND PROCEDURES

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Part II - Other Information

Item 1. 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”). 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. 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. 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 (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 complaint was filed on July 9, 2024. The lead plaintiff’s opposition was filed on September 6, 2024, and the Amended Defendants’ reply was filed on October 18, 2024. On December 30, 2024, the magistrate judge issued findings and recommendation that the Amended Defendants’ motion to dismiss be granted in part and denied in part. 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.

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. 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. On April 28, 2026, lead plaintiff filed a motion for final approval of the settlement, as well as motion for attorneys' fees. A hearing for the final approval of the settlement was held on June 30, 2026 at which time final approval was granted by the Court. During the six months ended June 30, 2026, the Company deposited $9.5 million into escrow for the proposed settlement, which consisted of $2.6 million paid by the Company and $6.9 million recovered under the Company's applicable insurance policies.

On May 9, 2024, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned O’Halloran v. 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 December 18, 2024, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned Da Silva v. Barrett, et al., Case No. 3:24-cv-02095 (the “Da Silva Action” and with the O’Halloran Action, the “Derivative Action”), purportedly on our behalf against the Derivative Defendants and asserting substantively the same claims as those asserted in the O’Halloran Action. On January 2, 2025, the parties to the Derivative Action filed a stipulation to consolidate the O’Halloran and Da Silva Actions and apply the stay entered in the O’Halloran Action to the Derivative Action. On February 10, 2025, the Court consolidated the O’Halloran and Da Silva Actions and applied the existing stay to the consolidated action under the caption In re Expensify, Inc. Derivative Litigation, Case No. 3:24-cv-00775-SI. On July 15, 2026, the Court granted the parties stipulation to continue the stay of the O’Halloran

Action. The Derivative Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the Derivative Action.

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. 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 Choi Action.

On March 20, 2026, a shareholder derivative lawsuit was filed in the United States District Court for the District of Oregon captioned Mangiagli v. Barrett, et al., Case No. 3:26-cv-00544 (the “Mangiagli Action”), purportedly on our behalf against the Derivative Defendants and asserting substantively the same claims as those asserted in the O’Halloran Action and the Choi Action. The Derivative Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the Mangiagli Action.

In addition to the matter described above, from time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. 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 may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. The results of any current or future litigation cannot be predicted with certainty. Regardless of the outcome, any litigation can have an adverse impact on our company as a result of defense and settlement costs, the diversion of management resources, and other factors.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our condensed consolidated financial statements and related notes, you should carefully read and consider the risks and uncertainties discussed below, together with the risk factors discussed in Part I, Item 1A. "Risk Factors," of our 2025 Annual Report (as updated and supplemented below and in our subsequent filings) and in other documents that we file with the SEC.

If our stock price falls below $1.00 for an extended period of time, our Class A common stock may be subject to delisting from Nasdaq.

On April 17, 2026, we received a deficiency letter from the Nasdaq Listing Qualifications Department (“the Staff”) of Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our Class A common stock had been below the minimum $1.00 per share required for continued listing on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 calendar days, or until October 14, 2026 (the “Compliance Date”), to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of our Class A common stock was required to be at least $1.00 per share for a minimum of ten consecutive business days before the Compliance Date. On May 28, 2026, we were notified by Nasdaq that we had regained compliance with the Minimum Bid Price Requirement and that Nasdaq considers this matter closed.

Although we have regained compliance with Minimum Bid Price Requirement, it is possible that we could fall out of compliance again in the future. If we fail to meet all applicable Nasdaq requirements in the future and Nasdaq determines to delist our common stock, which would adversely impact liquidity of our Class A common stock and potentially result in an even lower share price for our Class A common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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 June 30, 2026:

(1) Average price paid per share for purchases of shares of Class A common stock transactions excludes transaction costs and excise taxes.

(2) On February 27, 2025, 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 that expires on March 31, 2028, does not obligate us to repurchase any specific number of shares and may be modified, suspended or terminated at any time at our discretion. As of June 30, 2026, we had $39.8 million remaining under the share repurchase authorization.

(3) On May 13, 2026, we announced the commencement of a modified “Dutch auction” tender offer to purchase shares of our Class A common stock for an aggregate purchase price of up to $25.0 million at a price per share of not less than $0.98 and not more than $1.20 (the “Tender Offer”). The Tender Offer was not conditioned upon any minimum number of shares being tendered and was not subject to a financing condition. The Tender Offer expired on June 10, 2026. We accepted 6,053,023 shares for purchase at the purchase price of $1.20 per share. Following the expiration of the Tender Offer and the acceptance of shares for payment, no amounts remain under the Tender Offer authorization.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Certificate of Retirement

On August 6, 2026 the Company filed a Certificate of Retirement with the Secretary of State of the State of Delaware to retire 151,199 shares of LT50 common stock, par value $0.0001 per share, of the Company (“LT50 Common Stock”). All 151,199 shares of LT50 Common Stock were converted into 151,199 shares of Class A common stock, par value $0.0001 per share, of the Company (the “Class A Common Stock”). The Company’s Amended and Restated Certificate of Incorporation requires that any shares of LT50 Common Stock that are converted into shares of Class A Common Stock be retired and may not be reissued.

Effective upon filing, the Certificate of Retirement amended the Amended and Restated Certificate of Incorporation of the Company to reduce the total authorized number of shares of capital stock of the Company by 151,199 shares. The total number of authorized shares of the Company is now 1,056,613,065, such shares consisting of 1,000,000,000 shares designated Class A Common Stock, 21,871,197 shares

designated LT10 Common Stock, 24,741,868 shares designated LT50 Common Stock, each with a par value of $0.0001 per share, of the Company, and 10,000,000 shares designated preferred stock, par value $0.0001 per share, of the Company.

Item 6. Exhibits 48

Signatures 49