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PRCH, Porch Group Inc.

Software asset-light UnprofitableDistress / turnaround

Porch is a leader in the home software-as-a-service space, serving approximately 24 thousand companies across industries essential to the home-buying process—home inspectors, title companies, mortgage providers, and more.

Best Services for Homebuyers We are committed to being the go-to partner during one of life's most significant transitions—buying a home—by offering services that simplify moving and home setup. 3.

In return, Porch earns commissions and fees for these services.

Latest annual: FY2025 10-K

PRCH · Porch Group Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$419M

+33.7% YoY · 42% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $444M 5-yr avg $298M

Gross margin 70% 5-yr avg 48%

Operating margin 11.2% 5-yr avg −37.1%

Owner-earnings margin 20% 5-yr avg −2%

Free cash flow margin 20% 5-yr avg −2%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Unprofitable. No sustained operating profit across the record; an earnings multiple has nothing to rest on. What the record does show is revenue, the gross-margin trajectory, and the burn against the cash on hand. Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
What moves the needle: Operating margin has run around −58% through the cycle on a 66% gross margin, the operating line in the red even at its best — so the lever is whether the spending below the gross line can come down enough to clear a profit: revenue growth against the cost curve, and the cash runway until it does. Stock-based pay runs about 10% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −26%, above 15% in 0 of 5 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2019–2025

realized figures from each filing · older years to the left

2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
								Income statement
$78M	$72M	$192M	$276M	$287M	$313M	$419M	$444M	RevenueRevenue
72%	76%	69%	61%	20%	25%	66%	70%	Gross marginGross mgn
67%	39%	44%	40%	35%	30%	25%	24%	SG&A / revenueSG&A/rev
($88M)	($42M)	($83M)	($177M)	($190M)	($65M)	$37M	$50M	Operating incomeOp. inc.
−113.6%	−58.4%	−43.3%	−64.2%	−66.2%	−20.6%	8.7%	11.2%	Operating marginOp. mgn
($103M)	($54M)	($107M)	($157M)	($134M)	($33M)	($3M)	($16M)	Net incomeNet inc.
								Cash flow & returns
($29M)	($49M)	($35M)	($18M)	$34M	($32M)	$66M	$91M	Operating cash flowOp. cash
$7M	$7M	$16M	$28M	$24M	$26M	$24M	$24M	DepreciationDeprec.
$31M	($13M)	$17M	$84M	$123M	($52M)	$16M	$52M	Working capital & otherWC & other
$478K	$279K	$972K	$2M	$851K	$523K	$454K	$565K	CapexCapex
0.6%	0.4%	0.5%	0.9%	0.3%	0.2%	0.1%	0.1%	Capex / revenueCapex/rev
($30M)	($49M)	($36M)	($20M)	$33M	($32M)	$66M	$90M	Owner earningsOwner earn.
−38.4%	−67.7%	−18.6%	−7.3%	11.5%	−10.3%	15.7%	20.3%	Owner earnings marginOE mgn
($30M)	($49M)	($36M)	($20M)	$33M	($32M)	$66M	$90M	Free cash flowFCF
−38.4%	−67.7%	−18.6%	−7.3%	11.5%	−10.3%	15.7%	20.3%	Free cash flow marginFCF mgn
$0	$8M	$256M	$39M	$2M	$0	$0	$0	AcquisitionsAcquis.
—	$42K	$0	$2M	$6M	$0	$0	—	BuybacksBuybacks
—	—	-21%	-46%	-106%	-26%	6%	—	ROICROIC
—	-50%	-49%	-197%	—	—	—	—	Return on equityROE
								Balance sheet
$4M	$196M	$325M	$252M	$294M	$192M	$57M	$68M	Cash & investmentsCash+inv
$5M	$4M	$29M	$26M	$24M	$19M	$11M	$12M	ReceivablesReceiv.
$5M	$9M	$7M	$6M	$9M	$5M	$4M	$3M	Accounts payablePayables
($96K)	($5M)	$22M	$20M	$16M	$15M	$7M	$9M	Operating working capitalOper. WC
$10M	$216M	$605M	$611M	$481M	$365M	$88M	$101M	Current assetsCur. assets
$57M	$32M	$363M	$516M	$462M	$414M	$68M	$79M	Current liabilitiesCur. liab.
0.2×	6.8×	1.7×	1.2×	1.0×	0.9×	1.3×	1.3×	Current ratioCurr. ratio
$18M	$28M	$226M	$245M	$192M	$192M	$192M	$192M	GoodwillGoodwill
$48M	$268M	$1.0B	$1.0B	$899M	$814M	$797M	$807M	Total assetsAssets
$61M	$48M	$415M	$442M	$436M	$404M	$393M	$399M	Total debtDebt
$57M	($148M)	$90M	$190M	$142M	$212M	$336M	$331M	Net debt / (cash)Net debt
-12.4×	-2.9×	-14.5×	-20.3×	-6.0×	-1.5×	0.7×	0.9×	Interest coverageInt. cov.
($60M)	$107M	$217M	$79M	($36M)	($43M)	($25M)	($25M)	Shareholders’ equityEquity
46.4%	15.6%	20.1%	9.8%	7.2%	8.7%	6.9%	7.1%	Stock comp / revenueSBC/rev
								Per share
31.2M	36.4M	93.9M	97.4M	96.1M	99.6M	104M	106M	Shares out (diluted)Shares
$2.49	$1.99	$2.05	$2.83	$2.99	$3.15	$4.04	$4.18	Revenue / shareRev/sh
$-3.31	$-1.49	$-1.14	$-1.61	$-1.39	$-0.33	$-0.03	$-0.16	EPS (diluted)EPS
$-0.96	$-1.35	$-0.38	$-0.21	$0.34	$-0.32	$0.64	$0.85	Owner earnings / shareOE/sh
$-0.96	$-1.35	$-0.38	$-0.21	$0.34	$-0.32	$0.64	$0.85	Free cash flow / shareFCF/sh
$0.02	$0.01	$0.01	$0.02	$0.01	$0.01	$0.00	$0.01	Cap. spending / shareCapex/sh
$-1.92	$2.95	$2.31	$0.82	$-0.37	$-0.43	$-0.24	$-0.24	Book value / shareBVPS

The diluted share count moved ×2.58 into 2021 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	+8.4%/yr	+15.2%/yr
Capital spending / share	−18.9%/yr	−10.6%/yr

The record, charted

FY2019–2025

Each measure over its full record; the current point and the worst year marked.

Share count

104Mpeak FY2025

ROIC

6%low FY2023

Gross margin

66%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$66Mowner earningsvs.($3M)net incomelow FY2020

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $3M loss into $66M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($3M)	($33M)	($134M)	($157M)	($107M)
Depreciation & amortizationnon-cash charge added back	+$24M	+$26M	+$24M	+$28M	+$16M
Stock-based compensationreal costnon-cash, but a real cost	+$29M	+$27M	+$21M	+$27M	+$39M
Working capital & othertiming of cash in and out, other non-cash items	+$16M	−$52M	+$123M	+$84M	+$17M
Cash from operations	$66M	($32M)	$34M	($18M)	($35M)
Capital expenditurecash put back in to keep running and to grow	−$454K	−$523K	−$851K	−$2M	−$972K
Owner earnings	$66M	($32M)	$33M	($20M)	($36M)
Owner-earnings marginowner earnings ÷ revenue	16%	-10%	12%	-7%	-19%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $29M), owner earnings is nearer $37M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 0.7×

Does not cover its interest

Operating income $37M ÷ interest expense $52M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $336M · 9.2× operating profit

Heavy net debt

Cash $45M + ST investments $13M − debt $393M

What this means
Netting $57M of cash and short-term investments against $393M of debt leaves $336M owed, about 9.2× a year's operating profit (10.7× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -1d

Negative, funded by others

DSO 10 + DIO 0 − DPO 10 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital -26%

Below average through the cycle

5-yr median, range -106%–6%; 6% latest = NOPAT $18M ÷ invested capital $324M

Industry peers: median -17%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 16%

Positive this year, negative across the cycle

latest $66M = operating cash $66M − maintenance capex $454K (positive this year), after an earlier loss stretch (7-yr median -10%)

Industry peers: median 2%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 16% of revenue this year, a -10% median across 7 years. Treating stock comp as the real expense it is (less $29M of SBC) leaves $37M.
Are earnings backed by cash? $66M

Loss, but cash-generative

Net income ($3M) · cash from operations $66M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 45%

Returns about half

Dividends + buybacks $30M ÷ Owner Earnings $66M

What this means
Of $66M Owner Earnings, $30M (45%) went back to shareholders, $30M dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.02×

Harvesting

Capex $454K ÷ depreciation $24M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $419M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.30×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $393M vs $20M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (7-yr record) · 7 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 1 of 7 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.44/share (latest year $-0.03), the averaged base the calculator's gate runs on, and book value is $-0.19/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 0 of 7

What this means
Lost money in 7 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 5 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −72% → −26% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin widened — about −72% early to −26% lately, median −58% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2019 · −113.6% op. margin

What this means
Operations went underwater in 2019, understand why before trusting the good years.
Dividend record paid

What this means
Paid a dividend in 1 of the years on record.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our, or vendors', AI algorithms may be flawed or our competitors may leverage AI more efficiently or quickly, including by creating new products or more quickly adopting new products.”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$101M

Cash & short-term investments$68M
Receivables$12M
Other current assets$21M

Current liabilities$79M

Debt due within a year$8M
Accounts payable$3M
Other current liabilities$68M

Current ratio1.28×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.28×stricter: inventory excluded

Cash ratio0.86×strictest: cash alone against what's due

Working capital$22Mthe cushion left after near-term bills

Debt due this year vs. cash$8M due · $68M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+15.6%the freshest read on whether the business is still growing

Current ratio, recent quarters1.0× → 1.3×

Deeper floors

Tangible book value($246M)equity stripped of goodwill & intangibles

Net current asset value($679M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$401M$2M of it operating leases

Deferred revenue$4Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Acquisitions & goodwill

from the balance sheet & the 7-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$222M28% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity—goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$305Mover 7 years buying other businesses, against $6M of capital spent building

$99M written down across 2 years (2022, 2023): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 32% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 7-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Ehrlichman	$1.3M	$12.6M	($36M)
2022	Mr. Ehrlichman	$13.6M	−$5.1M	($20M)
2023	Mr. Ehrlichman	$4.3M	$9.0M	$33M
2024	Mr. Ehrlichman	$12.8M	$22.4M	($32M)
2025	Mr. Ehrlichman	$14.5M	$36.8M	$66M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership27.8%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$29M
The slice of the business handed to employees in shares this year, 7% of revenue, equal to 79% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Porch Group Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2019–2025.

2 of the 4 tests turned up something to look into; the other 2 came back clean.

Look hereDid debt outgrow the business?$61M → $399M
Debt rose from $61M to $399M while owner earnings went from about ($38M) to $22M: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?7 of 7 years
Management took an impairment or write-down in 7 of the last 7 years, $103M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Acquisitions, Insurance reserves, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
SPTSprout Social Inc	$458M	76%	-20.6%	-52%	2%
XPERXperi Inc. Common Stock	$448M	—	-29.1%	-19%	-7%
ALKTAlkami Technology Inc.	$444M	54%	-28.2%	-15%	-19%
VIAVia Transportation Inc.	$434M	40%	-24.8%	-24%	-21%
AVPTAvePoint Inc.	$419M	72%	-10.2%	—	12%
PRCHPorch Group Inc.	$419M	66%	-58.4%	-26%	-10%
CERTCertara Inc.	$419M	61%	4.7%	-0%	21%
GDYNGrid Dynamics Holdings Inc.	$412M	38%	-0.5%	-1%	7%
Group median	—	61%	-22.7%	-19%	-2%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Porch Group Inc. has delivered.

Today’s price $

Base Normalize · through-cycle ($22M) Net of stock comp (−$31M) Steady-state · maintenance capex ($90M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth, delivered—

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $90M on 128M shares outstanding, per the 10-Q cover, as of 2026-04-23; net debt $331M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($565K) runs well above depreciation ($24M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $90M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh PRCH against another business →

Cite: Owner Scorecard, "Porch Group Inc. (PRCH), the owner's record," https://ownerscorecard.com/c/PRCH, data as of 2026-07-09.

Manual order: ← PRAA its page in the Manual PRCT →

Industry order: ← PPLI the Software chapter PRGS →