A concerning divergence exists between accounting profits and cash generation, evidenced by an operating cash flow to net income ratio of -0.54 in 2024Q2.
| Cash from Operations | 73.8M | 17.94M | 22.88M | 42.17M | 7.74M | 46.45M | 8.74M | 26.09M | -373.07K | -11.29M |
| Operating CF Margin % | - | 12.05% | 15.54% | 27.69% | 4.93% | 30.36% | 7.06% | 39.67% | -0.65% | -33.97% |
| Operating CF Growth % | -185.72% | -21.58% | -45.76% | 444.95% | -83.34% | 431.46% | -66.5% | 7093.9% | 96.7% | - |
| Net Income | 58.98M | 25.62M | 25.97M | 30.48M | 26.89M | 35.29M | 48.99M | 26.32M | 1.61M | 11.02M |
| Depreciation & Amortization | 5.47M | 7M | 3.82M | 3.78M | 3.34M | 2.52M | 3.36M | 1.05M | 0 | 156K |
| Stock-Based Compensation | 0 | 0 | 1.75M | 0 | 391K | 185K | 7.16M | 0 | 0 | 0 |
| Deferred Taxes | 0 | 73K | -33K | 63K | -53K | 713K | -181K | 190K | 0 | -789K |
| Other Non-Cash Items | 9.36M | 1.68M | -147K | 2.19M | 129K | -934K | -20.79M | 268K | -1.89M | 649K |
| Working Capital Changes | 0 | -16.44M | -8.48M | 5.66M | -22.96M | 8.69M | -29.8M | -1.74M | -96.1K | -22.33M |
| Change in Receivables | 0 | 1.54M | 1.92M | 15.21M | -42.1M | 19.9M | -24.04M | -12.71M | 0 | -10.88M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | 599K | -7.4M | 3.33M | -5.58M | 4.75M | 2.83M | 3.92M | 0 | -327K |
| Cash from Investing | -7.61M | -709K | -24.86M | -3K | -7.99M | -1.05M | -4.42M | -15.32M | -250M | -862K |
| Capital Expenditures | -7.97M | -709K | -1K | -3K | -7.99M | -2.79M | -2.78M | -15.32M | -153K | -862K |
| CapEx % of Revenue | 2.57% | 0.48% | 0% | 0% | 5.09% | 1.82% | 2.25% | 23.29% | 0.26% | 2.59% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | -12K | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 358K | 0 | -24.86M | 0 | 0 | -12K | 0 | 0 | 153K | 0 |
| Cash from Financing | 84.66M | 17.82M | 10.55M | 82.02M | 508K | 13.29M | 5.38M | -6.22M | 250.78M | 17.08M |
| Debt Issued (Net) | 0 | -3.22M | 5.56M | 2.87M | -148K | -1.94M | 5.5M | -9.41M | 10.36M | 18.14M |
| Equity Issued (Net) | 0 | 21.04M | 0 | 80M | 0 | 15.29M | 0 | 0 | 9.41M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 84.66M | 0 | 4.99M | -849K | 656K | -68K | -123K | 3.19M | 231.01M | -1.07M |
| Net Change in Cash | 141.6M | 44.42M | 3.13M | 124.04M | -6.82M | 59.57M | 10.81M | 6.51M | 406.99K | 5.12M |
| Free Cash Flow | 65.83M | 17.94M | -1.99M | 42.17M | -250K | 43.66M | 5.96M | 10.77M | -373.07K | -12.15M |
| FCF Margin % | 21.2% | 12.05% | -1.35% | 27.68% | -0.16% | 28.54% | 4.82% | 16.38% | -0.65% | -36.57% |
| FCF Growth % | 2671.75% | 1002.82% | -104.71% | 16968.4% | -100.57% | 632.63% | -44.68% | 2987.95% | 96.93% | - |
| FCF per Share | 327.23 | 16.85 | -9.62 | 244.12 | -1.83 | 333.93 | 50.40 | 115.89 | -5.99 | -122.11 |
| FCF Conversion (FCF/Net Income) | 1.12x | 0.70x | 0.88x | 1.38x | 0.29x | 1.32x | 0.18x | 0.99x | -0.03x | -1.02x |
| Interest Paid | 0 | 0 | 325K | 0 | 0 | 0 | 0 | 0 | 0 | 8K |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Regulatory and Execution Uncertainty
As reported in recent financial statements, CHR's operating cash flow to net income ratio plummeted to -0.54 in 2024Q2, highlighting a significant and concerning divergence between accounting profits and actual cash generation that warrants immediate investor scrutiny regarding the sustainability of the company's reported earnings.
The sharp reversal from positive cash conversion in previous periods suggests that the company's reported net income may be increasingly decoupled from its underlying cash-generating capacity. This disconnect implies that either non-cash accruals are inflating earnings or that the business model is facing severe working capital headwinds that are not immediately apparent on the income statement.
Based on historical data, CHR's free cash flow trajectory has shifted from a peak of $30.4 million in 2022Q4 to a negative $6.7 million in 2024Q2, indicating a deteriorating trend that suggests the company's current operational model is struggling to maintain self-sustaining cash flow levels.
The erratic nature of FCF margins, which swung from 40.3% in 2023Q2 to -9.5% in 2024Q2, points to a lack of operational predictability. Investors should monitor whether this volatility is a temporary byproduct of the strategic pivot toward the CHEERS app or a structural issue with the company's core advertising and content monetization.
According to quarterly filings, CHR has maintained near-zero capital expenditure levels in recent periods, which suggests that the company is currently operating in a capital-light mode that avoids significant investment in physical infrastructure despite its ongoing transition into a broader digital ecosystem and app-based service provider.
While the lack of capex preserves cash, it may also indicate a reluctance to invest in the technological backbone required to compete with larger, more established digital platforms. This strategy appears to prioritize short-term liquidity over the long-term asset development necessary to build a sustainable competitive moat in the digital space.
As evidenced by the company's reported figures, CHR continues to hold a substantial cash position without deploying capital toward dividends or share repurchases, suggesting a conservative management approach that may be failing to optimize shareholder value despite the company's debt-free status and significant liquid asset base.
The absence of capital return programs, combined with stagnant revenue growth, implies that management may be hoarding cash to mitigate perceived regulatory risks or to fund future, yet-to-be-defined, strategic acquisitions. This capital allocation strategy warrants further investigation into whether these funds are truly unencumbered and available for deployment.
Based on an analysis of the 10-quarter data, the cumulative gap between net income and operating cash flow suggests that CHR's reported profitability has not consistently translated into cash, raising questions about the quality of earnings and the underlying efficiency of the company's revenue collection processes.
The persistent inability to align net income with operating cash flow over multiple periods suggests that the company's business model may be inherently cash-intensive or subject to significant timing differences in revenue recognition. This divergence is a critical signal that the company's reported profitability may overstate its actual financial health.
Quick answers to the most common questions about buying CHR stock.
Cheer Holding, Inc. (CHR) generated $17.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Cheer Holding, Inc. (CHR) generated $17.9M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Cheer Holding, Inc. (CHR) spent $0.7M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.