0001639723-25-000017
SEC filingNavan's Q3 FY26 revenue grew 29% YoY to $194.9M, but net loss widened to $225.4M due to IPO-related stock compensation and debt extinguishment costs.
For the three months ended October 31, 2025, Navan reported total revenue of $194.9 million, a 29% increase compared to $151.1 million in the same period last year. The growth was primarily driven by a 40% rise in gross booking volume (GBV) to $2.6 billion and a 12% increase in payment volume to $1.1 billion, reflecting expansion in customer base and deeper platform engagement. Usage-based revenue grew 29% to $179.9 million, while subscription revenue rose 26% to $15.0 million on higher adoption of Expense Management.
Gross profit increased 29% to $137.9 million, with gross margin unchanged at 71%. Cost of revenue grew 28% due to $5.3 million in IPO-related stock-based compensation and higher cloud hosting costs. On a non-GAAP basis, non-GAAP gross margin improved to 74% from 72%, excluding stock compensation and amortization.
Operating expenses surged, with research and development up 55%, sales and marketing up 63%, and general and administrative up 103%, largely from $81.8 million in stock-based compensation recognized upon IPO. Consequently, loss from operations widened to $79.2 million from $19.5 million. Net loss increased to $225.4 million, including $97.5 million in loss on debt extinguishment and $29.2 million in fair value adjustments. However, non-GAAP net income turned positive to $9.2 million (from -$13.9 million), demonstrating underlying operating improvement.
Navan reports two revenue streams: usage-based and subscription. Usage-based revenue, comprising 92% of total, grew 29% YoY in the quarter, driven by 40% GBV growth. Subscription revenue grew 26%, fueled by increased adoption of Expense Management. The company’s Net Revenue Retention Rate remained above 110% as of January 31, 2025, indicating strong customer expansion. International acquisitions (e.g., Regent) have contributed to geographic diversification, though segment-level breakdowns are not provided.
Management expects to continue investing in sales and marketing to drive customer acquisition, and in AI (Navan Cognition) to enhance platform capabilities. They anticipate operating losses to persist through at least fiscal 2027 as they invest for growth. No specific revenue or earnings guidance was provided. Seasonality is expected with strongest revenue in the third fiscal quarter (August-October). The company believes its cash position ($809.1 million) and credit facilities ($250M Warehouse Credit Facility, $100M ABL Facility) are sufficient for at least 12 months. Key risks include potential impacts from economic conditions on travel demand and the need for additional capital if growth initiatives require further funding.
Cash and cash equivalents surged to $809.1M as of October 31, 2025, from $157.7M at January 31, 2025, primarily driven by $713.3M in net IPO proceeds. Restricted cash (current and non-current) totaled $86.2M, bringing total liquidity to $895.3M. Total debt decreased to $206.6M from $617.9M, reflecting the conversion of $125M convertible notes and repayment of the Vista Facility and 2022 Promissory Note, partially offset by draws on the ABL facility ($37M) and warehouse credit facility ($168.2M). Stockholders' equity turned positive to $1.22B from a deficit of $(1.19B), due to the conversion of redeemable convertible preferred stock and IPO proceeds.
Non-cancelable purchase obligations totaled $38.7M, comprising $17.7M due within one year, $19.0M in years 1-3, and $2.1M in years 3-5. These primarily relate to cloud hosting and software subscriptions. Additionally, the company has a contingent liability of $4.8M under the Dutch NOW Scheme grant, which is under government review.
The company did not repurchase shares or pay dividends. Debt activity included $215.9M in new borrowings (mainly from the ABL facility and warehouse draws) and $468.1M in repayments (including $133.7M Vista Facility, $198.1M 2022 Promissory Note, $45.3M Trade Loan Facility, and $81.1M warehouse repayments). Capital expenditures totaled $13.7M, consisting of $13.1M capitalized software and $0.6M property/equipment, representing 2.6% of revenue.
The company operates as a single reportable segment. Revenue is disaggregated into usage-based ($479.6M, 91.5%) and subscription ($44.7M, 8.5%) for the nine months. Geographically, 62% of revenue came from the U.S. (nine months), 21% from the U.K., and 17% from the rest of the world. No single customer exceeded 10% of revenue in the current period.
Navan's cash flow from operations (CFO) improved significantly from -$41.5M to -$1.3M year-over-year, driven by a large increase in stock-based compensation ($135.1M vs $59.5M) and favorable working capital changes, particularly accrued expenses. However, net loss widened to -$325.3M from -$134.4M, indicating that operating cash flow remains negative and reliant on non-cash adjustments. Capital expenditures (capex) were $13.7M, consisting of $13.1M in capitalized software development and $0.6M in property and equipment, reflecting continued investment in the platform. Free cash flow (CFO minus capex) was -$15.0M, though this is not explicitly stated in the filing. The company did not pay dividends or repurchase shares. A notable anomaly is the large financing cash inflow of $630.6M, primarily from the IPO ($713.3M net) and debt proceeds, offset by debt repayments. The IPO also triggered significant non-cash conversions and stock-based compensation charges. Working capital swings included a $32.8M increase in accounts receivable and a $23.1M decrease in prepaids, partially offset by higher payables. Overall, cash generation remains weak, but the IPO provides substantial liquidity.