Expensify, Inc.EXFY
Expensify, Inc. Stock Compensation Disclosure
STOCK INCENTIVE PLANS
2009 and 2019 Stock Plans
In 2009, the Board of Directors approved the 2009 Stock Plan (“2009 Stock Plan”). As amended in 2015, the 2009 Stock Plan permitted the Company to grant up to 16,495,150 shares of common stock. In January 2018, the Company increased the number of shares of common stock reserved under the 2009 Stock Plan by 535,130 shares to 17,030,280 shares. In April 2019, the Board of Directors approved the adoption of the 2019 Stock Plan (“2019 Stock Plan", and together with the 2009 Stock Plan, “Stock Plans”). The 2019 Stock Plan permitted the Company to grant up to 8,173,970 additional shares, increasing the overall common stock reserved for grant under the Stock Plans to 25,204,250 shares. On November 9, 2021, the Board of Directors amended and restated the 2019 Stock Plan to, among other things, increase the common stock reserved for issuance under the 2019 Stock Plan to an aggregate of 16,856,770 shares of Class A and LT50 common stock.
The Stock Plans will continue to govern the terms and conditions of the outstanding awards granted under the Stock Plans. Upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan, an equal number of shares of Class A common stock will become available for grant under the 2021 Incentive Award Plan (“2021 Plan”) and the Company's Stock Purchase and Matching Plan (“Matching Plan” and together with the 2021 Plan, “2021 Incentive Plans”).
2021 Incentive Plans
In November 2021, the Board of Directors adopted, and the Company's stockholders approved, the 2021 Incentive Plans, which both became effective immediately before the effectiveness of the Company's initial public offering (“IPO”) Registration Statement on Form S-1 and use a combined share reserve. Under the 2021 Incentive Plans, 11,676,932 shares of Class A common stock were initially reserved for issuance pursuant to a variety of stock-based awards, including incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and other forms of equity and cash compensation under the 2021 Plan and purchase rights and matching awards under the Matching Plan. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2021 Incentive Plans will be increased upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan. The number of shares of Class A common stock reserved and available for issuance under the 2021 Incentive Plans as of December 31, 2025 and 2024 was 20,992,688 shares and 20,879,081 shares, respectively. The number of shares will automatically increase
each subsequent January 1 through January 1, 2031, by the lesser of (A) 6% of the aggregate number of shares of all classes of common stock outstanding on the immediately preceding calendar year, or (B) such lesser number of shares as determined by the Company’s Board of Directors or compensation committee; provided, however, that no more than 87,576,990 shares of Class A common stock may be issued upon the exercise of incentive stock options.
Stock Purchase and Matching Plan
The Matching Plan operates using consecutive three-month offering periods that commenced on March 15, 2022. Service Providers of the Company can participate in the Matching Plan by electing to contribute compensation through deductions from payroll or fee payments, or by receiving discretionary awards under the plan. On the last day of the offering period, the contributions made during the offering period are used to purchase shares of Class A common stock.
The price at which Class A common stock is purchased under the Matching Plan equals the average of the high and low trading price of a share of Class A common stock as of the last trading day of the offering period. At the end of each offering period, the Company may provide a discretionary match up to 1/10 of a share of Class A common stock for each share of Class A common stock purchased by or issued to a service provider under the Matching Plan that is retained through the end of the applicable offering period. No fractional shares will be issued by the Company. The Company will round to the nearest full share for shares purchased or matched shares issued to a Service Provider under the Matching Plan. The match rate applicable to each offering period shall be limited to 1.50% of the shares of any class of capital stock outstanding as of the exercise date applicable to such offering period. The Company estimates the fair value of matched shares provided under the Matching Plan using the closing price of the Company's Class A common stock on Nasdaq on the date of grant. The Company recognizes stock-based compensation expense related to the matched shares pursuant to its Matching Plan on a straight-line basis over the applicable three-month offering period.
Service Providers who participated in the Matching Plan during 2025 purchased a total of 3,061,193 Class A common shares, based on a purchase price of $2.06, resulting in gross cash proceeds to the Company of $6.3 million.
Service Providers who participated in the Matching Plan during 2024 purchased a total of 1,922,139 Class A common shares, based on a purchase price of $2.13, resulting in gross cash proceeds to the Company of $4.1 million.
The Company has historically elected to match each share of Class A common stock purchased or issued under the Matching Plan with 1/20 of a share of Class A common stock. During 2025 and 2024, the Company granted 1,118,124 and 638,850 shares of Class A common stock under the Matching Plan, respectively.
The Company has made discretionary contributions under the Matching Plan to eligible Service Providers. During 2025 and 2024, the Company granted 314,658 and 1,523,525 shares of Class A common stock as discretionary contributions under the Matching Plan, respectively.
Restricted Stock Units
Equity-Classified Awards
The 2019 Stock Plan and the 2021 Plan authorize the grant of RSUs. In September 2021, under the 2019 Stock Plan, the Company's Board of Directors approved and authorized 8,679,380 restricted stock units to be granted, which consisted of an aggregate of 4,339,690 shares each of Class A and LT50 common stock effective as of immediately prior to the effectiveness of the Company's IPO Registration Statement. Of this total, 2,980,260 RSUs, comprised of 1,490,130 shares of each of Class A and LT50 common stock were considered granted for accounting purposes in September 2021 to the Company's named executive
officers and certain members of management as the Company and these certain Service Providers had a mutual understanding of the key terms and conditions of the award on the board approval date, which occurred on September 24, 2021. RSUs granted to Service Providers in September 2021 vest upon the satisfaction of both a performance and service condition. The performance condition was satisfied immediately prior to the effectiveness of the IPO Registration Statement. The service condition for these awards is satisfied over eight years with a cliff vest for 1/8 of the grant on September 15, 2022 and quarterly vesting of 1/32 of the grant every December 15, March 15, June 15 and September 15 thereafter until fully vested. All remaining stock-based compensation for these awards will be recognized over the remaining service period using the accelerated graded method.
In November 2021, the Company granted 5,666,260 RSUs, comprised of 2,833,130 shares of each of Class A common stock and LT50 common stock, to certain Service Providers that were not included in the September RSU grant. These RSUs only have a service condition, which is equivalent with the service condition of the awards granted in September 2021, and were deemed granted for accounting purposes on November 10, 2021, the date these certain Service Providers had a mutual understanding of the key terms and conditions of the award.
On March 28, 2022, the Company granted a Service Provider 43,060 Class A common stock RSUs at a grant date fair value of $18.93 per share. These RSUs only have a service condition, which is satisfied over approximately eight years with a cliff vest for 1/8 of the grant on September 15, 2022 and quarterly vesting of 1/32 of the grant every December 15, March 15, June 15 and September 15 thereafter until fully vested.
On December 2, 2024 the Company granted Service Providers 400,675 RSUs, net of 159,841 shares withheld for taxes, comprised fully of Class A common stock at a grant date fair value of $3.40 per share. These RSUs have no future service requirement and were fully vested on the grant date.
Pursuant to the Company's Non-Employee Director Compensation Program, which was adopted under the 2021 Incentive Plans, the Company granted 153,690 Class A common stock RSUs during the year ended December 31, 2025. A total of 230,064 Class A common stock RSUs vested during the year ended December 31, 2025 related to previously-granted RSU awards as the quarterly service conditions were satisfied.
The Company granted 27,780 Class A common stock RSUs to members of the Company's Audit Committee during November 2021 in connection with each member's initial appointment to the Board of Directors and the consummation of the IPO. For accounting purposes, the grant date was considered to be November 12, 2021, as this was the date the Company filed its final prospectus pursuant to Rule 424(b)(4) related to the pricing of the IPO. The IPO price was a key determination of the number of RSUs awarded to members of the Audit Committee and therefore on this date the Company and each Audit Committee member had a mutual understanding of the key terms and conditions of the awards granted. The RSUs granted were fully vested as of December 31, 2024 upon satisfaction of the year service condition.
During the year ended December 31, 2025, RSU activity was as follows:
| Class A Common Stock | LT50 Common Stock | Weighted average grant date fair value per share | |||||||||||||||
Outstanding at December 31, 2024 | 2,150,101 | 1,894,470 | $ | 30.21 | |||||||||||||
| RSUs granted | 153,690 | — | $ | 2.23 | |||||||||||||
| RSUs vested | (623,613) | (388,166) | $ | 24.82 | |||||||||||||
| RSUs cancelled/forfeited/expired | (132,502) | (132,502) | $ | 33.65 | |||||||||||||
Outstanding at December 31, 2025 | 1,547,676 | 1,373,802 | $ | 30.30 | |||||||||||||
The fair value of RSUs on their vesting dates during the years ended December 31, 2025 and 2024 was $2.3 million and $3.9 million, respectively. The weighted average grant date fair value per share of RSUs granted during the years ended December 31, 2025 and 2024 was $2.23 and $2.82, respectively.
As of December 31, 2025, the Company had $70.0 million of unrecognized stock-based compensation expense related to unvested equity-classified RSUs, which is expected to be recognized over the remaining weighted average life of 3.56 years.
Liability-Classified Awards
On June 20, 2025, pursuant to the 2021 Incentive Plans, the Company's compensation committee approved and authorized the grant of Class A common stock RSUs to certain Service Providers, to be issued on a quarterly basis through March 2029. Issuances of the Class A common stock RSUs will occur automatically each quarter using a predetermined fixed dollar amount that gradually decreases over time. Each RSU will vest immediately on the date it is issued, and both the issuance and vesting are subject to a service condition that will ultimately be satisfied over four years. The first quarterly automatic issuance occurred on June 20, 2025 and the remaining RSUs will be subject to quarterly issuance and vesting thereon until fully issued. The number of RSUs to be automatically issued on each issuance date will be determined based on the closing price of the Company's Class A common stock on Nasdaq on the 15th calendar day of the month during which the RSU award is issued, or the immediately preceding trading day. The awards are accounted for as liability awards and will be recognized on a straight-line basis over the life of the awards.
During the year ended December 31, 2025, the Company issued 628,359 Class A common stock RSUs and settled liability-classified awards with a fair value of $1.2 million.
As of December 31, 2025, the Company had $2.6 million of unrecognized stock-based compensation expense related to unvested liability-classified RSUs, which is expected to be recognized over the remaining weighted average life of 1.22 years.
Stock Options
The Stock Plans and the 2021 Plan provide for the grant of incentive and nonstatutory stock options to Service Providers. Under the Stock Plans and the 2021 Plan, the exercise price of incentive stock options must be equal to at least 110% of the fair market value of the common stock on the grant date for a “ten-percent holder” or 100% of the fair market value of the common stock on the grant date for any other participant. The exercise price of nonstatutory options granted must be equal to at least 100% of the fair market value of the Company’s common stock on the date of grant.
The Company has only granted options under the Stock Plans. Options typically vest over four years and are exercisable at any time after the grant date, provided that Service Providers exercising unvested options receive restricted common stock that is subject to repurchase at the original exercise price upon termination of service. The repurchase right lapses in accordance with the vesting schedule of the exercised option. Early exercises of options prior to vesting are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises of unvested options are recorded as a liability. These repurchase terms are considered to be a forfeiture provision and do not result in liability accounting. There were no repurchases of exercised restricted common stock during the year ended December 31, 2025 and an immaterial amount during year ended December 31, 2024.
As of December 31, 2025, there were no shares subject to repurchase related to unvested stock options that had been early exercised. As of December 31, 2024, there were 92,230 shares subject to repurchase related to unvested stock options that had been early exercised for which the Company recorded a liability of $0.1 million, which is included within Accrued expenses and other liabilities on the Consolidated Balance Sheets. This liability was reclassified to common stock and additional paid-in capital upon vesting of the underlying shares.
A summary of the Company's stock option activity was as follows:
| Shares | Weighted average exercise price per share | Weighted average remaining contractual life (in years) | |||||||||||||||
Outstanding at December 31, 2024 | 3,759,580 | $ | 2.29 | 4.11 | |||||||||||||
| Options exercised | (361,924) | $ | 0.89 | ||||||||||||||
| Options cancelled/forfeited/expired | (149,283) | $ | 1.65 | ||||||||||||||
Outstanding and exercisable at December 31, 2025 | 3,248,373 | $ | 2.47 | 3.49 | |||||||||||||
The total pretax intrinsic value of options exercised during the years ended December 31, 2025 and 2024 was $0.5 million and $5.6 million, respectively. The total pretax intrinsic value of options outstanding and exercisable at December 31, 2025 and 2024, was $1.3 million and $7.4 million, respectively. The intrinsic value is the difference between the estimated fair market value of the Company’s common stock at the date of exercise and the exercise price for in-the-money options. No options were granted during the years ended December 31, 2025 and 2024.
The total grant date fair value of options vested during the years ended December 31, 2025 and 2024 was $1.1 million and $2.8 million, respectively.
As of December 31, 2025, there was no unrecognized stock-based compensation cost related to unvested stock options.
Cash received from option exercises and purchases of shares under the Stock Plans for the years ended December 31, 2025 and 2024 was $0.3 million and $0.4 million, respectively.
During the year ended December 31, 2025, no shares were withheld for the cashless exercise of stock options. During the year ended December 31, 2024, there were 98,403 shares withheld for the cashless exercises of stock options.
Stock-Based Compensation
The following table summarizes the stock-based compensation expense recognized for awards granted under the Company's authorized stock incentive plans (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Matching Plan shares | $ | 3,980 | $ | 4,835 | |||||||
| Equity-classified restricted stock units | 22,021 | 28,426 | |||||||||
| Settlement of liability-classified restricted stock units | 1,198 | — | |||||||||
| Stock options | 997 | 2,964 | |||||||||
| Total stock-based compensation | 28,196 | 36,225 | |||||||||
| Less: stock-based compensation capitalized as software development costs | (1,618) | (2,688) | |||||||||
| Total stock-based compensation expense | $ | 26,578 | $ | 33,537 | |||||||
Stock-based compensation expense is allocated based on the cost center to which the award holder spent time during the reported periods. Stock-based compensation is included within the following components of expenses on the Consolidated Statements of Operations (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cost of revenue, net | $ | 10,637 | $ | 12,506 | |||||||
| Research and development | 7,701 | 11,900 | |||||||||
| General and administrative | 4,768 | 6,815 | |||||||||
| Sales and marketing | 3,472 | 2,316 | |||||||||
| Total stock-based compensation expense | $ | 26,578 | $ | 33,537 | |||||||
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.