Good afternoon, everybody. I'm Aaron Kimson, a VP on the software equity research team here at Citizens JMP. I'm really excited to have Expensify's COO, Anu Mural Dina- I practiced it. Muralidharan with us today. Anu, how was your trip out from New York? It was great. A pleasure, and you, and you did quite well on the second round. Second try. I practiced it yesterday. All right. So wanna start off maybe with just a few minutes on you and your career, both pre-Expensify, and then up to becoming the COO and a board member. Yeah. I think we've had Dave here the last couple years, so. Yeah, for sure. I worked a bunch in banking, consumer banking, and then in payment stack at Marqeta before I joined Expensify. My role at Expensify was kind of a figure-it-out-as-you-go journey. I joined 8.5 years to the day, and at the time, we didn't really have an operations team. We had a growing payments business in the sense that we were moving a lot of money for reimbursements. We're thinking about having a card program, and someone needed to figure out how to manage fraud, how to underwrite these businesses, how to set up fraud controls that actually don't immediately hurt adoption, but at the same time, we don't lose money. So, and then, of course, keeping up with all the compliance requirements that being a payments company requires of you. So I put a lot of that in place and built a team around it and let them take the reins and moved on to do a lot of product-related work around building the card, building better job optimization engines for things like scanning a receipt and customer support, and things like that. I've worn many hats. That's one of the great things about working at Expensify. You don't have to sort of decide on what you wanna do, and then you're stuck in that pigeonhole. You can kind of re-engineer yourself, if you will. And so I was a pretty critical part of the team that took the company public, spoke to a lot of investors, did a lot of work with the investment bank, day-to-day operations of that. I've worked a lot on, you know, our SDR program on paid digital marketing since we went public, none of which I had any kind of background in, so it's been interesting learning. So yeah, it's been a crazy ride. Absolutely. And then you've used the metaphor of thinking about yourself as a Swiss Army knife, as COO, right? So kind of given the ambitious product roadmap you have at Expensify, maybe what are the two or three initiatives that you're spending the most time on right now as COO? Yeah, so two things, kind of very different. One of them is, we started doing a lot more paid, digital marketing last year. We did that and SDR program together, but the SDR program, we can talk about that a little bit more if you're interested, but wasn't really ever going to be positive ROI, given our economics, so we shifted away from that. I'm still working on trying to make our paid ads, positive ROI, make it worthwhile to spend money on that. More to come on that in the future quarters. The other thing I'm working on is our new product, New Expensify. My specific interest is: how can we get this product that we are re-engineering to appeal to more small businesses, more VSBs, to adopt out of the box? Now, what I mean when I say that is, what we notice on Expensify Classic is companies sign up. They're clearly decision-makers because we know that based on their emails and reverse enrichment of their domains, but they don't really wanna talk to sales. They don't really want to talk to support. They want to, for lack of a better word, putz around with the product and figure it out. And Expensify Classic is better than a lot of other competitors at that, but it's not as good as it could be, 'cause we see a lot of drop-off at that point. 'Cause there's, you know, when you sign up, there's no data because you haven't put anything in there, so it's hard to visualize how the product can help you. So I'm working on a lot of initiatives where on New Expensify, we sort of figure out the answer to those problems so that a company, no matter what size, and especially if they're smaller, can sign up and immediately sort of take a gander around the product, and it tells them how the product can help them solve their problems, which helps us with conversion. That's my passion project, if you will, so that's what I'm focused on. Great, and that's, that's a perfect segue. So for those who might not be familiar in the room, can you tell us what is New Expensify, and how is customer feedback when it's kind of a rolling launch, I think, is the way Dave framed it- Yeah ... you launched last fall and are continuing on. Yeah. So New Expensify aims to solve for several things that we, over the years, have observed and learned from on Expensify Classic. I'll try to, like, bucket them 'cause they're kind of different priorities but one solution. The first one is, we've always talked about how Expensify's customer acquisition model is what differentiates us from all of our competitors. What I mean when I say that is, we are probably the only product that allows anybody to sign up and use the product, no matter what their company is using, even if the company is not using really any tool except Excel and manual receipts for expense management. So what this allows employees to do is they can solve their pain point without the company having to intervene and make a decision, and they can solve that pain point for free by using the product.... At the time of the IPO, we had talked about this, so it's public information. 60% or so of our revenue actually came from this bottom-up motion. So employees adopting the product, kind of using it, telling their colleagues, who in turn create this movement, a kind of grandiose term, but, like, introduce us to the company who end up adopting the product and paying for it. That contributed to 60% of our revenue. Now, that's great, but that's only one bottom-up, viral, word-of-mouth use case, and what we need in order to get millions and millions of paid members every single month, every single quarter, is for there to be a much wider base of free functionality that makes our product useful to individuals on a daily basis, weekly basis, and that engagement is what's gonna drive more and more word of mouth. So New Expensify is built on this hypothesis: like, if we give individuals more and more ways to engage with the product in their daily life, both personal and business expense use cases, then we are top of mind more often, and as these individuals get jobs, move jobs, they're gonna bring them with you, and that's gonna help us drive more new customer growth. So that's one hypothesis. The other is what we've noticed: companies that are on Expensify, it's not a straight line from an employee or a vendor sending an expense or a payment request, and you approve it and pay it. It's not a straight line. There's often questions around it, collaboration that needs to happen, in order to get clear on what that expense is for. Are all the details actually properly coded? And then it gets approved and exported, and today, a lot of that conversation, I mean, all of that conversation seems to happen off Expensify, and what we notice is for audit purpose, happens off Expensify, and then they kind of summarize it in comments in a report, so they need to codify it. So there's this friction in the use case, where you have a workflow, but there are tangential needs to that workflow, which we don't support. So New Expensify's imagined chat-first, and that's a very confusing term 'cause we often get, "Why? This is in Slack. We don't need another Slack." But the point isn't to create another Slack. The point is to make that expense workflow, that transactional conversation, a little more streamlined, so you get more value out of the product. So that's the second piece, and the third is to create a more valuable back-office solution. So right now on Expensify, you can do expense management, invoicing, bill pay, but I bet most people don't know about invoicing or bill pay because we introduced it much later, and it's not built in a very modular fashion. So you'd have to discover these functionalities, and it's kind of a chore to do so, and then you'd have to integrate your existing expense use case with invoicing and bill pay, and the whole thing just works but isn't optimized. So New Expensify is kind of rethinks this. So everything is built modularly. A company can adopt Expensify to do invoicing, to do bill pay, and then eventually adopt it for expense management or vice versa, and discovering all of these functionalities is going to be much more straightforward. So those are the three, use cases, if you will. To summarize, better viral word-of-mouth adoption, better, more streamlined workflow management, and more, value for your subscription dollar, if you will. Perfect, that's a great overview, and the question I get most from investors on Expensify, so how should we think about the next levers of monetization between potentially chat, payroll, a price increase, maybe even charging for instant money transfer? Mm. What's next on the roadmap? Yeah. So when we think about, our economics, and it's kind of a perfect segue from the previous question, there's really two pieces. One is new customer growth, and the other is the ability to retain existing customers and grow with them, right? Like, that's just any business. So for new customer growth, we think of more and more, viral features because the more viral features there are, the more we get talked about, both individuals, their network, but also companies and their clients and companies and their vendors. So all of these are viral networks, and the more we can incorporate ourselves into these workflows, the more warm leads we're gonna get at very low cost. So that's, that's one driver, and the other is: how do we make ourselves more valuable to the companies that have already adopted us? Which is the back office, sort of aggregation of tools piece. So you're gonna pay the $18 for the subscription, $9 if you have the card, and that's gonna get you not just expense management, but invoicing, bill pay, and eventually payroll and travel. And so that $18 starts to look really, really cheap, and it's going to make it very difficult and very sticky for you to be tempted enough to go off to a competitor's solution. So those are the two pieces. Like, how can we get more individual... How can we get more new customers at low cost, and how can we retain them by establishing value in their workflows? Yep, and then bouncing around a little bit, I wanna talk about capital allocation. So as of... You reported fourth quarter results a few weeks back. You had $41 million left on your share repurchase plan at the time. Mm. Hadn't bought back any stocks since 2Q 2023. The stock is down significantly- Yep ... from the time of the IPO, really, even over the last six months... how you think about capital allocation at this time? Yeah, great question. Challenging times. So, one of the key things, one of the reasons we haven't been more aggressive with our buyback program is because, as you probably heard in the last earnings call, we've been giving a lot of thought to how do we optimize our expenses, such that we can go back to the fundamentals of what we always talked about, even during IPO, is that this business will always be cash positive. Like, we exist to grow, but also to make money, and how do we always ensure that? So we've done a lot of work in sort of looking at... and, you know, the debt market has changed significantly, so money is not as cheap as it used to be before, which we used to pad our balance sheet quite a bit with our debt, which we've consolidated and paid back. So while we've been doing things like that and looking at all our expenses and seeing where we can tighten the belt without hurting our growth efforts, we've kind of paused on being too aggressive with the buyback program. But going forward, we will do a mix of debt optimization and buyback, so that that $46 million or so that's left will get utilized. But we've been sort of heads down, making sure we get the fundamentals tightened up and in a place that we're comfortable to give free cash flow forecasts, which we've done. And then going forward, we now have clear line of sight into how much can we afford to put aside in order to do more buybacks. Yeah. The market definitely loved the free cash flow guidance. Yeah A couple weeks back. Good to have some good news, right? Yeah. And then going back to the outsourced SDR program that you ran and you guys shut down, I think, on the 3Q call, you said you were bringing that to an end. Yep. Can you talk about what the motivation was there originally, how it played out, and what your learnings were? Yeah, it's kind of interesting we went 360 on that because, you know, when we IPO'd, we talked about this. As a company, as long as I've worked there, we've always said that, the process of doing outbound sales is a race to the bottom. And we say that because look at the economics that you need in order to make it work. You'd first of all have to pay the SDRs, which means you have to get a certain size company that you need to be able to attract in order to justify that cost. And if you go down market, you'll need a lot more, which means you'll need a lot more SDRs, which just makes your economics upside down. And so we've always kind of been very skeptical, and also, if you go... Okay, so you can't go down market too much, 'cause you don't have the economics. If you go up market, you have intense competition, 'cause really, the same lists are being sort of worked to the bone by every single expense management card provider out there. We knew all of this, but we wanted to give it another shot. We wanted to see if we could use AI-based tools in order to do it, perhaps cost effectively. So we did; we ran a lot of experiments. We thought maybe outsourcing it would be more cost effective, which would justify the economics at a certain size. We tried every which way, and I think, given where we play very competitively in terms of the size of the market we go after, layering in an SDR-based sales program is kind of upside down, and so we could spend more time trying to optimize it. At the time, it looked like for the same dollar spent on SDRs versus the same dollar spent on digital ads, the digital ads were giving us more of a return. So we shut down the SDR program and directed those funds to digital ads. Since that time, we've worked a little bit with digital ads as well, to see what's the payback period, do we like it? Do we wanna keep spending on which campaigns? And we've actually also optimized that. You'll see a decrease in the total amount we're spending across these types of programs going forward, although it won't be zero, it'll be healthy. It's not gonna be in the millions of dollars, which is where we've been before. Got it. Then before I open it up to the audience for a few questions, maybe just a couple on card, 'cause you know, you know the card as well as anybody. First, at a very high level, how should we think about the growth potential for Expensify Card? Yeah. So the card's been kind of the thing that has grown double digits year after year, despite kind of softer paid member growth, which is great, like we can use it. But when we think about the card itself, we think about it not in terms of its economics, but rather in terms of its feature potential. We still notice that the audience is probably split between, I don't want to give my employees a corporate card and put that kind of spending power in their hands, so I want to stick with reimbursables, approval workflows, and export to the ledger. Versus, I'm using an Amex or Chase card, and I like it, and I don't want to shift. Then the third are the audience that are open to, "Okay, how will this help me?" The card helps companies that want to empower their employees, but want to do it with controls in place, and also want that level of visibility, real-time visibility into the spend. Because believe it or not, one of the biggest challenges for companies is that employees don't actually... if they have a corporate card program, this is not a problem, but if they don't, then they are basically waiting for employees to scan receipts and do their expenses. And I'm sure you do this. I do this, like I postpone, and so now I've bled into the next month, and it causes a lot of angst for the accounting teams. So the companies that feel that that problem is their biggest problem end up being the ones that really want the card because if you put the card in an employee's hand with controls in place, so you're not worried about spend just kind of going off the rails, you get real-time visibility into that spend, and you can worst case scenario, take over, code it, and export it, so your books are always closed on time. So that problem is a big problem for some companies, but not all companies, and we kind of meet the customer where they are because we wanna give them value and allow them to do whatever workflow makes them comfortable. So we don't. We try to talk about the benefits of using the Expensify Card, but we don't aggressively try to sell it, because either way, we make good money. Either they take the card, and they have a subscription discount, and then we make money on interchange, or they don't, and they pay a slightly larger subscription fee. Either way, we make money. We wanna give customers the best possible workflow for them. Got it, and then one more on card. So you recently became your own payments processor- Yeah. -which has been a long time coming. Yeah. With that, it's gonna help your top line, right? Yeah. Your GAAP revenue, you're gonna have- Absolutely. Interchange is gonna go from a contra expense to GAAP revenue. Can you walk us through the journey of becoming your own payments processor? Yep. What'll be the benefits, you know, from business and accounting perspective, and then is this something unique to Expensify? I mean, you were at Marqeta before, so you have some expertise- Yeah. Or could any company do this? Yeah, so for those of you that are not familiar, we are on the existing program. We are not a program manager. Our card payments processor, who's Marqeta, is the program manager, and the program manager generally contracts with the issuing bank, with the network. And so when we receive interchange dollars from this program manager, GAAP rules say that it can't be revenue. It has to be a negative cost, which is really confusing 'cause the cash back we've paid this customer does come out of revenue. So we've got this artificial drag on revenue, and it's just a very confusing concept that we have to explain, and analysts have to back it out of their models and correct it, and it's just been a whole nightmare. So primarily, and actually exclusively driven by a motivation to change that, we became our own program manager. Being your own program manager means you have to contract. You have to do the contracting with the issuing bank, you have to do the contracting with Visa, and then you just work with Marqeta as a processor, so they just do the tech part of the card, transaction processing. And then, you do everything from, like, dispute management. There's, like, a bunch of other operational chores that you have to take on, but that gives you, because we used to give Marqeta a portion of the interchange for doing all that, now we get to keep that, which improves margins by 20%. So it's a double whammy in a good way. It gets your net interchange to revenue, and it gives you a 20% boost on that. So that's been great. That will be great because we have to migrate all the existing cards over. Now, can anybody do that? Probably, but should they do that? Because it's... Unless you're a public company that requires this sort of treatment and the better economics are worthwhile to you, it's quite a lot of operational overhead, and you've seen how long it took to even do it. A team has been working full time on getting all these contracts in place, getting the PCAOB audit off that, you know, revenue treatment, and it's been... I, I mean, we started right after we went public, so it's taken, like, two years to do it. So, yeah, it's not that anybody will stop you from doing it. It's just a lot of work. That 20% margin improvement might not be worth it. Yep. All right, open it up to the audience if anyone has questions for Anu. Go ahead, Austin. Yeah, what are you doing that doubles your growth on Expensify Card? How are you kind of leaning into that and building out getting that card to... Yeah. So first of all, we basically have these, a team of people called onboarding specialists, who work with customers that sign up and start rolling out Expensify to their company. The first piece is just getting education really dialed in, 'cause if this solves a real pain point for you as a company, then you need to know about that, and that onboarding specialists are trained to give you that information and to sort of work with you to figure out if this might be a good fit for your company and your culture and your processes. So that's number one. Number two is we do cash back. We basically... Everybody gets 1% cash back, but if you have more than $250,000 in monthly spend, then you get 2% cash back. Then, in all of your, And then you get the subscription discount, you get 50% off. Your subscription is $9, not $18. And when we do your monthly billing, both the receipt but also your account manager and also in product, we tell you, "Here is how much cash back you could have made or you made," but more importantly, you asked how we are leaning into it. So we say: "Okay, here's the amount of cash back you could have made if you had put all your spend on the card, and if you had put all your spend on the card and gotten this cash back, your Expensify subscription would have cost you this much, so it's minus the cash back." In a lot of cases, companies could actually make money using Expensify if they did that. So we lean into that message, like, "You could have made money and made your life easier. You needn't have paid us anything to use this product." And all of that is helping. That's, I think, what's propping up the growth of the card. But again, all of that is great, but if it doesn't really fit with the customer's need, then we don't push beyond that. Got it, and then maybe one more from me. So payroll's a piece of the story that I find really- Yeah ... exciting 'cause it can make all your users active every month, right, and help with monetization. Where are you at as far as getting all your money transmission licenses and that process, and once you have all of them, does that kind of shift maybe towards the front of the product roadmap? Yeah, so we, we just got... We had a conditional approval in California, and we just got full approval, so that's- it's a, it's a pretty big deal. We are waiting on, I think, Texas and New York, New York being a pretty big one- Mm-hmm ... because it's a large market. So once we get those two, I think the way that we might roll out payroll is actually work with a payroll API provider, sort of like we are doing with travel. Like, we work with a travel agent who, like Spotnana, who basically gives you API access to their functionality, so you can bring it to market faster. That just helps us learn a little bit more about how to cross-sell payroll and even sell payroll on a modular basis, and once it's grown to a point that the increased economics from not using a vendor but doing it yourself makes sense, we'll move to that. That's, that's sort of the plan. Honestly, I don't think that this will happen in 2024. I think it's probably a 2025 initiative because the New York license is gonna take time, and we already have a pretty ambitious roadmap, which, if we deliver on, when we deliver on, is gonna be a real growth engine, which is something we're very excited about, so it's probably a 2025 initiative. Got it. All right, well, thank you so much, Anu. For sure. This was great. Yeah, same here. Thanks, everyone.