More collaboration based use cases, like, maybe it’s a very small business or maybe even a site project. Like, maybe it’s a group trip you’re planning or maybe it’s a community center like planning events. Like, those kinds of use cases, creating groups without needing a workspace and collaborating, paying, and splitting expenses. These are all things we iteratively keep pushing. And the intention behind it is, of course, to get real world data on each of them so we can start to really tease the ideal design for this product. And then along the way, we’ll start migrating existing users, but all of that comes later.
Unidentified Analyst : Super helpful. And then for you, Ryan, it was encouraging to see that paid member number uptick to 730,000 in October. I guess how much of that would you attribute to seasonality, maybe, and how much would you attribute to maybe improving demand fundamentals out there?
Ryan Schaffer : I think it’s it could be an element of both. So I like I mentioned, our subscriptions are increasing. I think we’re doing a great job of increasing subscriptions. It’s just been competing with a decrease in activity. So there’s certainly a top line push, from our side that’s competing with the activity or reduction of in our customer base. But in October we saw that subscriptions continue to go up and also, our pay per use users, we saw an increase there too. So it’s — I think it’s an element of both. When we don’t have the reductions, the decrease in activity fighting against the increase in subscriptions…
Anu Muralidharan: We grow.
Ryan Schaffer : We’re growth happy.
Operator: Next, we have Lake Street Capital.
Unidentified Analyst : Just curious to know the — you mentioned the, the Shareholder Letter mentions the pricing of competitors. Have you seen any — just even anecdotally — have you seen that pricing improve — your relatively cheaper pricing, improve your adoption versus competitors?
Ryan Schaffer : Yes. So I think that — maybe to give us more context to everyone on the call. So the environment that — the environment has been challenging over the last couple of years because we’ve seen some well-funded startups raise a lot of money in a 0 interest environment and, spend that money. And now that we’ve been in a higher interest environment for some time, we’re starting to see that they have to respond and their business model doesn’t make sense anymore. So what we’re seeing is our competitors introduce paid plans. These are people who were charging nothing for their product against our paid product. And which is — that’s just a challenging, head-to-head. Right? But what we have seen recently, which we’re encouraged by is that they are trying to start charging, because businesses charging for their software makes a ton of sense.
Right? There’s a reason people charge for that for it. So the competitive environment is shifting over the next 12 months in a way that we think is very favorable to us. And also, it’s important to note that they seem to be charging on a per see basis where we have a mix of subscription and activity. And, we think that we’re going to end up being a less expensive on a blended, per seat basis. So we think the competitive environment is going to be easing up here in a couple quarters, so that’s also another positive indicator that we’re looking at when we look at the future.
Unidentified Analyst : Okay. And then the — you had the balance sheet movement where you decided to pay off the $36 million of debt. Do we plan to be a cash burner in Q4 based on the current forecast?
Ryan Schaffer : It’s kind of guidance. But, I’d say we expect to burn less, and we expect not to burn in 2024.
Operator: Next, we have Morgan Stanley. Give another second here. Maybe some muting issues. If not, we can come back at the end. Okay. Next, we have JMP Capital. Aaron, I believe I see you on the line.
Aaron Kimson : So I appreciate the total customer account that you started giving in the 10-Qs in the first quarter this year. We don’t have it for 3Q yet, but it’s kind of been declining, right, from, yes, 1Q, 2Q. So I’m just wondering, can you distinguish what you’re seeing a little bit between your VSB customers with one to 9 employees? And then your SMB customers with 10 to 500 employees. And is there any color you can give there since the time of the IPO on the relative portion of business that comes from kind of each of VSB, SMB, mid-market and enterprise.
Ryan Schaffer : Great question. So we’ve seen — and this has been kind of consistent since COVID, really, is that the larger the company, the better they weather the storm. So we’ve seen a — our smallest customers get hit harder than our larger customers. And, that — that’s both with in going out of business or also just reductions. So I think that — I think we’ve said this before, and it — those trends are holding true that the — there’s more customers. Ones and twos are certainly, not doing as well as they have historically, and the larger customers are more or less the same, or at least not, seemingly impacted to the degree that the under 10 the employees are.
Anu Muralidharan: But that’s the mix — I think you’re asking, like, has the mix changed? Largely, the mix is still very — is still the same. Like, it’s excuse ever so slightly higher now versus at the time of IPO, but it’s still not shifted enough to change our mix by any means. So the mix itself, I’d say it’s largely still the same.
Ryan Schaffer : Yes. Definitely — how the segments rank. Like if that the smaller customers are struggling more, so they become a smaller piece of revenue, but they were always the smallest.
Anu Muralidharan: Exactly.
Ryan Schaffer : 1 to 2 is always the smallest size.
Anu Muralidharan: And then the acquisition funnel is also — like, basically, you acquire the same mix as well. So when you lose, you lose the same mix. You lose smaller customers more than larger customers, and then you also acquire smaller customers more than larger customers, and we haven’t seen any dramatic shift there.
Aaron Kimson : That’s very helpful. And then secondly, congrats on the interchange reclassification. I know that’s been a while coming. So 2 things there. How should we think about the linearity of the adoption of the new Expensify cards and the one time boost to revenue that’s going to provide as we go through 2024? And then will you continue to break out total interchange revenue during the transition so we keep tracking that growth that growth rate when some is GAAP revenue and some is not.
