So all of this — again, there’s quite a lot here. I’d love to go into a lot more detail. If you go back to our road map room where you can see actually using Expensify and chat with a product management team and me about all of this in a whole lot more. And so please scan the QR code, click the link, whatever it might be, and I’d love to keep talking. So in conclusion, Q1 is a great quarter, where I think we delivered incredibly strong sort of cash and cash flow growth. Our new Expensify had incredible development progress. And I think we’re moving away from the core engineering and product development to the final stretch. I just polished performance and improving reliability. So that’s where we are right now. Everything we demoed there, that’s like 95% real.
And so it’s going to be 100% real by the time we talk again. Next time we talk, new Expensify is going to be fully in market and generating paying customers. Expensify travel is going to have paying customers generate new incremental revenue. And also, the new card program that Ryan mentioned is already fully underway. And so we’re — it’s going to take time to convert all our cards over, but that process is going to be started. So, it’s been a great quarter. We’ve had a bunch of tremendous progress across the board, and I can’t wait to talk again next quarter. But for now, it’s some questions. Sorry about that. We’re having some technical difficulties. We had a cup of coffee spilled on our, the laptop that used do this. So, we had a swap out one and technical difficulties but here we are.
Thanks, staying with us.
A – Unidentified Company Representative: Perfect. So first, I believe we have [George] on the line. Let’s go over to Citi. Matt, are you there?
Matt O’Neill: I guess the first question, I was just curious on — going back to the paid members chart where you guys showed the April data point, at least historically, April has generally shown a little bit of a jump. I don’t know if there’s any kind of nuances to this in April, but it looks like it sequentially came down a tiny bit. And then it might be interrelated, so I’ll just ask my sort of follow-up now. But I think last quarter, you guys had talked about leveraging certain incentives to get people to more proactively switch from sort of old cars to new card. How do you guys deploy those? Can you talk a little bit more about how those are kind of coming into the market and working and maybe that has an interplay to paid members.
Anuradha Muralidharan: Yes, great question, and thank you. So the car transition, I think, is going well. We do have some financial incentives that we can deploy. We haven’t deployed for those yet. But I think the biggest kind of carrot to get people over is we’ve deployed new functionality that is only available on the new card, specifically the ability to create an unlimited amount of virtual cards, which people use on like a per vendor basis. So that’s a highly desired feature that we’re only putting on the new card, and we’re seeing customers come over as soon as they hear that. So we do have financial incentives. We haven’t used them yet, but we do have full confidence that we’re going to get everyone transitioned over by end of the year, and we’re very incentivized to get it done quickly. So it’s a high priority for us.
Matt O’Neill: So you haven’t used the incentives — the financial inserts yes. Okay. That’s helpful.
Unidentified Company Representative: Second question we got on.
Anuradha Muralidharan: He’s a two-part already. He’s a two-part already.
Unidentified Company Representative: Okay. Great. Elyse, switch over here.
Anuradha Muralidharan: Great question I actually think it’s a combination of both. When we issued guidance last quarter, we’re not very basic. We’ll give you a very realistic view of how we feel at that point in time. More time is passed. We’re closer to the end of fiscal year 2024 than we were last quarter, and our views have updated a little bit, and that’s why we’re updating you all that we’re raising the guidance a little bit. And it’s a combination of the cost cutting but also the new products we have coming to the market.
Unidentified Company Representative: Aaron Kimson is on the line.
Aaron Kimson: This is Aaron Kimson from Citizens JMP. I want to ask first on opensource contractors. In 2023, you paid out over $8 million to opensource contractors as you progress with the ambitious product road map and with full-time heads coming down five, but it’s almost 4% of your full-time heads. Is it fair to assume you’ll be relying more on the opensource community going forward? And how is cost per job trended since you stopped, I think, Ryan, you talked about surge pricing on the 3Q — how has it come down since then?
Anuradha Muralidharan: It’s a great question. So the opensource community is actually an incredible resource. So the super-fast. It’s basically an unlimited amount of supply, and we just have to give them demand, and they kind of build it for us. It’s really great. Now we’ve talked about in the past that we were doing search pricing in order to build the community up. At this point, we’ve reduced the rates, which we’re paying out. And in this quarter, we saw more pull request so that’s a metric was more pull requests and less per pull request. So we actually got more done and we paid less on average than we did. So those costs are coming down. It’s part of the cost-cutting initiatives, but we haven’t seen any decrease in output. Yes.
Aaron Kimson: And then secondly, just a quick one. Your largest shareholder owns about 15% of the outstanding shares. Obviously, he doesn’t have meaningful voting power, given the share structure. Have you had any recent dialogue with the shareholder? And is it something you’d be open to doing.
Anuradha Muralidharan: I don’t.
David Barrett: I mean, we talk with anyone.
Anuradha Muralidharan: We talked to anyone that e-mails us, and also, we have a whole chat room to talk to investors, but I think that we don’t probably comment on individual investors. I know that’s not really the answer you want but we know Steve well from when we were a private company, but we don’t have any active dialogue with them at this point in time.
David Barrett: Yes. Anyone who wants to talk to us, just call us.
Unidentified Company Representative: Great. [indiscernible] are you on the line still?
Unidentified Analyst: I am, but I believe [indiscernible] all my questions. So we’re good here.
Unidentified Company Representative: Okay. Last chance then, do we have anybody from [indiscernible] Capital still? I think that’s everybody we have on the line.
Anuradha Muralidharan: All right. Thank you all.
Unidentified Analyst: I’m on from Eric Martinuzzi from Lake Street. Just a couple of quick things. After reducing expenses last quarter, do you have a time line on when you could see greater investment back into sales and marketing?
Anuradha Muralidharan: Same question. I think that right now, we’re — we’ve been doing a lot of experimenting over the last couple of years. And this year, we’re focused on investing in what’s been working I do think that — maybe towards the end of the year or next year, we’ll see an uptick in sales and marketing. But right now, we’re focused on getting the most out of the dollars we’re deploying and what’s worked versus more moonshot stuff, which is what we’re doing in the past.
David Barrett: Yes, I think it’s about doubling down on the winners right now.
Unidentified Analyst: A couple of other quick ones. Given the softer SMB market, have you made any pricing changes?
Ryan Schaffer: We have not made any pricing changes. We are very excited about the new travel product, which brings in a transactional revenue, which is something we’re obviously very excited about. There’s a booking fee and also a rev share component. So, we think that is going to be positive for the business. But in terms of our subscription pricing, no change.
Unidentified Analyst: And then this is kind of a combination question. But do you still expect all the customers to be shifted over to the credit card program by year-end? And related, what was the churn in the quarter? And do you expect that to trend throughout the year?
Anuradha Muralidharan: So yes, we do expect to have the program — everyone on the new card program by the end of the year. That’s a huge focus internally for us. And in terms of churn, we did see a little bit of churn, but just kind of the normal amounts that a big component of the decrease in users is the decrease in activity in our existing user base, which we think is more macro and ultimately temporary. But I mean, there is some element to churn. But also, we think that travel is one of the best tools we have to combat churn. It’s a reason people cite when they do leave for a competitor. And now that we’ve announced this, we have a lot of interest. So we’re very excited about it.
Unidentified Company Representative: Aaron, did you have another question in your hand came back up.
Aaron Kimson: No, [indiscernible]. Thank you.
Unidentified Company Representative: Okay. That is everybody that we’ve got then
Ryan Schaffer: All right. Thank you all. Again, apologies for those technical difficulties. You never know when a cup of coffee is going to come splashing down on your laptop, but we got through it. So thank you all for your time, and we’ll talk to you next quarter. I want also check out the chat room. We’ve posted kind of a summary of everything we discussed here. We’ve been told that there is kind of an image over some of the slides — all these slides are in the chat room, it’s exfy.com/roadmap or use the QR code in the slides also all this information is on our IR website. So, thank you all, and we’ll see you next quarter.
David Barrett: Great. Thanks, everyone.
