$0.00
$0.25
bear $0.00
base $0.00
bull $0.25
margin of safety $0.10
market price* $2.42
Business condition attached to the margin of safety
Stock-based compensation falls well below the cash the business generates before compensation (roughly $12-18 million a year), so that owner earnings turn durably positive, and revenue stops shrinking.
Business. Expensify sells cloud expense-management software, best known for its SmartScan receipt capture, corporate cards and reimbursements. It earns money mainly from annual subscriptions, billed per active member, plus card interchange. In 2025 it averaged about 650,000 paid members across roughly 39,700 companies. Revenue has been flat to down since the 2022 peak of $169.5 million: $150.7 million in 2023, $139.2 million in 2024 and $142.1 million in 2025. Average paid members fell from about 688,000 in early 2024 to about 650,000 in 2025. The first half of 2026 revenue was $67.8 million against $71.8 million a year earlier. Owner earnings. We measure what is left for shareholders after operating cash flow, the swings in working capital, stock-based pay treated as a real cost, and the capital spending (mostly capitalized software) needed to stand still. Expensify produces decent cash before stock compensation: operating cash flow of $20.1 million in 2025 and $23.9 million in 2024, and it has no debt (cash was $63.1 million at the end of 2025). But it pays its staff heavily in shares: stock compensation was $52.3 million in 2022, $41.2 million in 2023, $33.5 million in 2024 and $26.6 million in 2025. After deducting it, owner earnings per share were about -$0.26 (2022), -$0.51 (2023), -$0.11 (2024) and -$0.16 (2025). 2021 (-$0.41) is shown but excluded from the reference window because the November 2021 IPO distorts that year's share count and stock compensation. Our reference level is the median of 2022-2025, about -$0.21 per share. We removed working-capital swings, including movements in customer settlement balances, because they are timing effects; this is a judgement and the series ties to reported cash flow exactly. Trailing-year owner earnings worsened from 2024 to 2025 (-$0.11 to -$0.16), so we assume no improvement in year one. Nothing in the filings dates a reversal. The 2025 first-half figures (net loss $6.2 million versus $12.0 million a year earlier) are encouraging but one half-year is not a trend, and revenue is falling. Base case, about $0 per share. Stock compensation is largely locked in: at the end of 2025 the company had $70.0 million of granted-but-unrecognized restricted-stock cost, to be expensed over the coming years, so it cannot shrink overnight. With flat-to-declining revenue and no contracted or otherwise secured growth, we credit none, and the operating business does not show a positive owner-earnings stream after paying for its staff in shares. We do not count the balance-sheet cash, which is outside our method. Hoped-for cost cuts, card growth or new products are not evidenced enough to include, so we value the earnings stream at zero rather than at a negative figure, since shareholders are not liable beyond their shares. Bear case, $0 per share. Members and revenue keep drifting down (paid members fell about 5% from 2024 to 2025, and first-half 2026 revenue is down about 6%), while stock compensation stays near the $25 million level implied by the $70 million backlog. Owner earnings stay negative, the company continues to dilute holders, and nothing remains of value on our method. There is no debt to push the case below zero. Bull case, about $0.25 per share. The visible lever is stock compensation, which has fallen four years in a row (from $52.3 million to $26.6 million). If that continues for about four more years while pre-compensation cash generation holds at the 2024-2025 level (about $18 million after capital spending, before working capital), owner earnings turn modestly positive at roughly $0.05-0.06 per share from about 2030. Losses in the interim offset part of that, which is why the value is small. What would make these estimates wrong. If the recent fall in stock compensation accelerates and revenue stabilizes, the business is worth materially more than we show. Our method also gives no credit for the $63 million cash balance or for a possible acquirer paying for the customer base. Conversely, continuing share issuance under the employee matching plan and grants would deepen dilution. We could not fully explain the swing in 2025 working capital (accrued expenses +$9.7 million against other current assets -$6.9 million); it nets to a modest inflow and was removed from owner earnings.