It’s not like you to go open to the chat experience or whatever. Every one of these is all three. When you’re sharing documents or chatting, you’re doing payments, you’re infusing all three of the use cases throughout the entire product and at all times. And so the ways when we keep talking about chat is because we think that chat allows me to sort of — allows us to add a moat out of every feature. Again, expense management isn’t new as this has been around since the dawn of time. But we think that actually building a collaborative real-time experience around it is, and we can bring new life into these use cases. And in the process of doing so, expand in this huge market that’s been largely untapped. Now we talk about this idea of real-time expense processing.
What makes it real time is that people are in the product already so they’re in a position to act and build time. And as much as we might like, basically, a user to prioritize expense reports, they’re not — if it’s not on their phone, if they’re not actually in front of their face, they’re just going to ignore it for as long as possible. Great thing about getting people into a real-time chat experience, however, is that when they receive the payment request, they immediately turn around and just to prove it because it’s just right there. We make it so easy to do. So we can cut days out of the reimbursement process merely because days are waiting for the user to actually do something. We can take an action that took 72 hours and make it to 7 seconds.
And so it’s a completely different experience because Chat changes the behavior of the user to be into the products dell times, and that’s in the position to act in a very different manner than they can another tool. So you can’t just — it’s not a matter of just making the money move fast. You have to make the user lose fast. That’s a whole different experience. Second, when we do bill pay and invoicing, again, functional that we’ve had for a long time. But our experience is about trying to capture more of the conversation around the bill and the invoice itself. Because every time you invoice our clients or pay a bill from the clients, — there’s a conversation around there. preceding that engagement was basically some conversation around MSA and SOW.
There are some terms of the contract, whatever it might be. Currently, that conversation happens in, I don’t know, e-mail, Slack or maybe a phone or something like this. Now we can capture all of those contract conversations in the chat tool itself, and then we can be the long-term storage repository of the final terms of the deal. So when you’re reviewing the invoice, the invoice terms are actually right there in products. You see when it’s supposed to start and how much it’s going to cost. And so when you’re actually approving a bill, you can assess whether or not that bill is actually in line with the stated purpose of the agreement itself. It’s a completely different experience paying bill when we’re able to talk to everyone involved in real time, and that’s just another feature of adding sort of infusing chat about the existing old experiences.
And next, let me talk about travel management. Now we’ve been talking about travel for a long time. We just travel bookings and so forth. But we think that there’s a great opportunity for — I think the term is a leisure. I don’t know why it’s called that. I do know was call that business plus leisure and just a fantastic term. can’t got to love the Internet. But anyway, I think that a great thing about leisure is that when you’re traveling for work, you’re going cool places. And you’re — so the idea of book-ending and staying a couple of extra days and so forth, it’s incredibly common, but it’s not necessarily supported by the traditional tools. Additionally, when you travel places, you’re traveling with other people, and you don’t work all the time.
You have off-hours. — when you go to a conference, people are on call or on duty when — but then they go wild out at night. And so as a result, we try to recognize the real-world social dynamic of people who are doing business travel. And there’s a lot of — normally, you would basically spin off of WhatsApp group or something like this to sort of after hours, you go someplace else. Instead, we just build that social group for you automatically. When you travel and multiple people travel to the same city, we’re just going to throw them to a chat room together. So they can actually start coordinating their dinners and the act or of actual work activities right here in products. And so again, travel management is nothing new, but a social sort of leisure-based travel management is new.
And I think that’s something that’s highly defensible because it requires integrated seamless chat functionality that has no one else has. And then finally, we talked about Universal Chat. And basically, everything we talked about here is designed to sort of cross IT countries seamlessly. Like you don’t need an account. You don’t need a password or any of this. It’s basically just built in automatically. So anyone with an e-mail address or phone number, you can collaborate with. They can join doesn’t require an app. You just open up in the mobile app or just respond to the e-mail, whatever it might be. So we’re going — we’re working very hard to eliminate the barrier to adoption, such that no matter who you integrate with and who you collaborate with, they can engage with you directly to the product in whatever terms are most sort of pallet.
And so all of this foundation, we think, creates a highly sort of dispensable number of values for of the high-margin subscription because fundamentally, in the end, pretty much any technology can be reproduced — but it’s very hard to reproduce chat functionality because that is actually held at the highest standard of any sort of usability or reliability and performance sort of standards. And so this is a completely different level of technology development. That’s why we’ve been spending so long on it, and that’s why we’re years ahead of what we think the competition to do. So the kind of a of this overall, the three major sort of components of what we think is a long-term growth is first, we start with the ESB SMB market because it’s huge and untapped and no one else is going after it.
There is really no organized competition there. It’s — our competition is e-mail in it cell, and it’s not fighting back. And so we think that it’s a huge opportunity that’s largely uncontested. Second, we think the only way to go out and get it, that the only way any also has ever gotten it was through viral word of mouth. And we’re the only ones even trying that. If you look at any of our competition, all of them have the exact same business model, pretty much the exact same product being sold the exact same way, and it’s all basically strongly. So we think that the way that you can capture this, it has to be with a different angle. The way others have captured this huge untapped opportunity has been through a viral word-of-mouth manner. Now — and we’re going to do that for expense management because we think that we’re at the sort of the nexus of the three most important and most viral use cases in the Internet.
And so we think they’ll complete that again. And then finally, we think the subscriptions are the way that you can make profit in the sand sort of like red competitors because it’s not a new idea to want to do everything, but actually doing everything is quite hard. And we’ve been working on building the foundation for a very, very long time. We think in the end, the most defensible way to operate in this market is what the best unit economics. It’s basically to have the lowest cost acquisition into the largest market with the highest margins. Not exactly the most genius stuff, but saying it is actually quite hard. I’m saying it’s easy, but doing it is quite hard. And so we’ve been focused entirely on unit economics and sort of profitable long-term growth for a very long time.
And so we think that we have a very strong advantage of the competition, which is just now starting to think about this. Finally, I’d be remiss not to say something about AI because that just seems to be the thing that everyone’s picked up on. But it’s not a coincidence that Expensify has been pushing a chat focus for a very long time because — we’ve known that this is going to come. I mean everyone’s known it’s going to come. But now it’s going to come is different than actually doing something about it. We built our entire platform around chat because chat is the language of AI. The sort of generative AI chatbots are — it’s going to completely change how user interfaces are designed. Like historically, there’s a bunch of buttons. There’s a bunch of searching and things like this.
And that’s still going to be there in a way, but you can interact with AIs more natively actually through chat, to talking and things like this. And so our platform is about trying to build a single foundation where all kinds of information and people can collaborate on the same level of the AIs themselves. And so if you have a super intelligent hanging out with you don’t want to basically just press a bunch of buttons to talk to them. That’s not actually how they talk, they talk in the language that we talk as well. And so chat is the language of AI and Expensify as a foundation such as the AIs can collaborate on an equal footing with humans themselves. So we’ve been talking about all the stuff for such a long time. And I know that it’s been a lot of work to get to this point, but we’re extremely happy to actually start showing it rather than just talking about it.
And so here on the screen at a QR code, one more trick of Expensify chat is that it’s got public roots. If you scan that code, you’re going to be on web and mobile, whatever it might be. You dropped directly into a room where again, don’t need to sign up, you don’t even need to type an e-mail address. You can just observe and read a bunch more information. There, you’re going to get direct access to me, the rest of the product team, the executive team to talk in real time about the project itself. Now again, this isn’t about financials. This conversation is about the road map itself. So it basically stick to the topic. But if any questions about basically how the product works, why we’re doing certain things, how is differentiated from the competition and so forth.
That’s where we would love to talk with you. And so just scan that code to drop directly into a room, you’re going to see the whole chat experience. You can start requesting real money from your friends. You can start splitting bills, you can start experiencing everything we’re talking about right now. It works on all platforms, works with e-mail, phone number works everything. We think it would be great that you create an account, but we’ll talk to you there. So I can’t wait to talk to you soon. It’s going to be a great time.
Unidentified Company Representative: With that, I guess, let’s open it up to questions. Vicki.
Operator: Great. Let’s get started with Citi. George, (ph) do we have you on the line?
Unidentified Participant: Yeah. This is George on for Steve Enders. Thanks for taking the questions. Maybe just to start with on the paid user number. It was kind of flat quarter-over-quarter. Really appreciate the color on net adds versus churn versus contraction. Does that quarter-on-quarter stabilization give you guys any sense that maybe we’re nearing a bottom kind of excluding seasonal factors or is there just still two poor visibility? Just kind of appreciate you update on how you guys are feeling about that metric.
Ryan Schaffer: Yeah. It’s tough to say if we’re at the bottom right now. Obviously, David went, as David showed, we have a lot of positive indicators for the future. January, I think I mentioned January is usually a pretty soft month in terms of users. So that’s not completely unexpected. But we’re working real hard to improve all inbound traffic inbound leads, and we have some exciting green shoots data that we shared with you. But I think it’s probably jury still loud what furthers the bottom or not. Obviously, we hope so, but is cross. We’ll now see.
Unidentified Participant: Great. Okay. And then one quick follow-up. I appreciate the FCF guidance and obviously, a big improvement in cash flow generation this quarter. Do you — is there more cost cutting on the horizon that’s required in order to hit that FCF target or do you guys believe you have things in place?
Ryan Schaffer: It’s a good question. So we implemented the changes midway through the quarter. So there’s no — at this point in time, there is no additional cuts needed. We’ve made all the cuts. Not all of them took effect in time to be experienced in Q4. So we do believe that we’ll see a greater impact of the cuts in Q1 and future quarters. But as of today, everything is the momentum, we don’t need to do anything else.
Unidentified Participant: Okay. Thanks for taking the questions.
Ryan Schaffer: Thank you.
Operator: All right. Next, we have JP Morgan.
Unidentified Participant: Hello, everyone. Thank you for letting me ask a question, and hi, David. Nice to meet you. So I was wondering, if you could comment on the long-awaited migration to the new Expensify. Is the statement in the press release about the global launch in 2024. Does that imply that you expect the migration to be fully completed this year?
David Barrett: Great question. So — it’s a rolling launch. I mean, as you can see, it’s already out. Customers are using it. It’s being used for different use cases. We are migrating people over in batches and so forth. We intend to keep the old website around for as long as people need it and we don’t know how long exactly that’s going to be because it’s basically — we’re pulling everyone over with a honey that sinter — is that the right phrase. And so we want to make sure that we’re taking the time to do it right. We’re not in a hurry to basically push people over. We’re basically making sure that they come over time. So I can’t predict that. I would like to say yes, but I just — I don’t know for certain because fundamentally, that’s going to be up to customers.
Unidentified Participant: Okay. Perfect. And Ryan, a quick question about the interchange I remember last quarter, you were suggesting that the transition may take up to a year because new customers will be on the new card, but all customers will switch whenever their contract comes up. So when do you expect to see the most impact from this transition throughout the year? And what was the initial impact on revenue perhaps in the fourth quarter? Because I can see that you’ve probably restated historic numbers as well for the EUR11 million versus historic numbers? And what was the impact that you booked in the fourth quarter?
