0001628280-26-042552
SEC filingRevenue grew 40% to $220M driven by 50% GBV growth; gross margin expanded 300 bps to 74% while operating loss widened.
For the three months ended April 30, 2026, total revenue increased 40% to $220.2 million from $157.5 million in the prior year period. Usage-based revenue, the primary driver, grew 41% to $202.1 million, supported by a 50% increase in gross booking volume (GBV) to $3.1 billion and a 29% increase in payment volume to $1.3 billion. Subscription revenue rose 26% to $18.1 million, reflecting broader adoption of the Expense Management offering. Gross profit improved 46% to $163.1 million, with gross margin expanding from 71% to 74%, as revenue growth outpaced cost increases on a relatively fixed cost base, aided by AI-powered customer support. GAAP loss from operations widened to $18.1 million from $15.9 million, driven by higher operating expenses. However, on a non-GAAP basis, income from operations swung to $23.6 million from $2.7 million, highlighting underlying operating leverage. Net loss narrowed significantly to $20.5 million from $61.3 million, primarily due to the absence of prior year's loss on extinguishment of debt ($20.5 million) and fair value adjustments ($10.1 million). Free cash flow was negative $11.6 million compared to positive $0.5 million in the prior year, reflecting timing of customer payments versus vendor payments.
The MD&A does not report formal segments, but revenue is disaggregated into usage-based and subscription. Usage-based revenue continues to dominate at 92% of total revenue, with growth fueled by customer acquisition and expanded engagement across Travel, Corporate Payments, and on-demand offerings. Subscription revenue, though smaller, grew 26%, driven by new and existing customers adopting Expense Management. Key business metrics—GBV and payment volume—both showed strong momentum, with 50% and 29% growth respectively, indicating healthy platform activity.
Management expects to continue investing in sales and marketing to drive customer growth, as well as in AI and platform innovation (Navan Cognition, Navan Edge). The transition of R&M customers to the unified Navan brand is underway, with associated restructuring costs of $1.8 million recognized in the quarter; further costs may arise. No specific quantitative guidance is provided, but the company anticipates seasonality in travel demand and potential macroeconomic headwinds. Liquidity remains strong with $518.4 million cash and equivalents and $162.2 million in short-term investments, along undrawn capacity under credit facilities. The company expects to continue incurring operating losses at least through fiscal 2027 but believes existing resources are sufficient for at least the next 12 months.
As of April 30, 2026, Navan held $518.4 million in cash and cash equivalents, $162.2 million in short-term investments (primarily U.S. government and agency securities and corporate bonds), and $126.6 million in restricted cash (current and non-current). Total current assets were $1.31 billion against total assets of $1.71 billion. The company's liquidity position remains strong, with no material changes in the allowance for credit losses on accounts receivable or corporate card receivables.
Total debt stood at $124.5 million, consisting of $118.2 million under the warehouse credit facility (secured by corporate card receivables, maturing February 2028), $6.0 million under the ABL facility (secured by travel receivables, maturing March 2028), and $0.3 million in other notes payable. The warehouse facility bears interest at SOFR plus a margin, and the ABL facility at SOFR plus 2.5%. Debt decreased by $0.3 million from January 31, 2026, primarily due to repayments of other debt. All debt covenants were complied with.
Shareholders' equity was $1.24 billion, up from $1.21 billion at fiscal year-end, driven by stock-based compensation ($38.4 million) and stock option exercises ($16.3 million), partially offset by net loss of $20.5 million and other comprehensive loss of $5.6 million.
Purchase obligations totaled $37.7 million as of April 30, 2026, all due within three years ($18.8 million within 1 year, $18.8 million in 1-3 years). These primarily relate to cloud hosting and software subscriptions. Additionally, the company disclosed a $12.3 million lease commitment for a new London office entered into in May 2026 (subsequent event). There are no material off-balance-sheet arrangements aside from the VIEs (Liquid Labs) and guarantees related to the warehouse facility.
Also notable is a $4.8 million liability for Dutch government grants (NOW Scheme) under review, with $4.3 million classified as non-current.
Navan did not repurchase any shares or pay dividends during the period. The company invested $4.8 million in capital expenditures (including $4.6 million in capitalized software development costs and $0.1 million in property and equipment), representing 2.2% of revenue. No new debt was issued; existing facilities remained drawn at prior levels.
The company operates as a single reportable segment. Revenue is disaggregated by type: $202.1 million usage-based (92%) and $18.1 million subscription (8%). Geographically, the U.S. accounted for 66% of revenue, the U.K. 17%, and the rest of world 17%. No other individual country exceeded 10% of total revenue.
Net loss improved to -$20.5M in Q1 FY2027 from -$61.3M in the prior year, but operating cash flow deteriorated to -$6.8M from +$4.6M. The divergence is driven by significant working capital outflows: accounts receivable increased $13.7M (vs. a $5.6M decrease last year), accrued expenses dropped $9.4M, and deferred revenue fell $1.9M (vs. +$3.4M). Non-cash adjustments, particularly stock-based compensation ($37.3M) and depreciation ($5.7M), continued to be large.
Capex (capitalized software + property and equipment) totaled $4.8M, up slightly from $4.0M. Free cash flow is not explicitly stated, but the combination of negative operating cash flow and capex implies negative free cash flow. Investing activities also included $59.1M in investment purchases offset by $53.5M in maturities, resulting in a net investing outflow of $28.7M. Financing activities provided $14.0M, entirely from stock option exercises, with no debt or equity issuances in the current period.
Capital returns to shareholders were absent; no share repurchases or dividends were declared. The company's cash position declined by $23.1M to end at $645.0M. Overall, cash generation from operations remains weak despite improved net income, largely due to working capital drag and continued investment spending.