Expensify is seeing rapid growth from New Expensify as the expense management company expands its AI capabilities and connects its platform with AI assistants including ChatGPT, Claude and Cursor.
Revenue from net-new customers who signed up directly for New Expensify and had never used Expensify Classic increased more than 250% year-over-year to over $10 million in annual recurring revenue. Those customers now represent more than 10,000 new accounts, and the figure excludes existing Classic customers who have migrated to the new platform.
The growth is particularly notable because Expensify’s overall quarterly revenue declined 5% to $33.9 million. The company is effectively operating two interconnected products at different stages of their lifecycles, with the established Expensify Classic generating cash from a mature customer base while New Expensify is intended to drive future growth.
Founder and CEO David Barrett described Classic as a stable and profitable product requiring relatively little ongoing investment, but one with a customer population that will naturally decline because new users can no longer sign up for it. Expensify is using that foundation to fund development of New Expensify.
Management believes New Expensify can address a market 10 to 100 times larger than its traditional opportunity. The company estimates there are approximately 300 million businesses worldwide, while less than 1%, and according to Expensify closer to 0.1%, have ever paid either Expensify or one of its competitors for expense management software.
Artificial intelligence is becoming an important part of the redesigned platform. Customers can now configure Expensify, automate expenses and analyze spending through natural-language interactions by email, text or within the application. AI-powered workflow agents are also entering beta.
Expensify also launched Expensify MCP, connecting its expense platform to AI assistants such as ChatGPT, Claude and Cursor. The integration is designed to allow users to access and work with expense data using natural-language commands from external AI tools.
The company shipped more than 30 additional product improvements during Q2 across corporate cards, mileage tracking, policy controls, bulk editing and AI-powered spending controls.
Expensify Card interchange revenue increased 12% to $5.9 million. The company generated $8.4 million of operating cash flow and $6.4 million of free cash flow, while its net loss narrowed to $3.9 million from $8.8 million a year earlier. Adjusted EBITDA reached $6.6 million compared with negative $1.4 million in the prior-year period.
Expensify ended the quarter with 640,000 paid members, down 2% year-over-year. For the full year, the company expects free cash flow of $12 million to $14 million.
Management also made a substantial bet on the company’s valuation during the quarter. Expensify repurchased approximately 6.8 million Class A shares, reducing shares outstanding by about 7%. Its modified Dutch auction tender was substantially undersubscribed despite offering a premium to the share price.
KEY QUOTES:
“This is the most exciting quarter in years, as we are finally able to pull back the curtain on New Expensify’s growth.”
“Expensify isn’t a sleepy, low-growth company.”
“A small, innovative, and quickly growing New Expensify product… aims to capture a market 10-100x larger than our traditional product ever could.”
David Barrett, Founder and CEO of Expensify
