Free cash flow remains volatile, ranging from 2.3% to 16.6% of revenue, while the OCF/NI ratio of 2.24 suggests that reported earnings are heavily influenced by non-cash charges.
| Cash from Operations | 63.22M | 57.41M | 43.06M | 38.7M | 41.65M | 25.05M | 21.95M | 13.88M | 4.27M |
| Operating CF Margin % | - | 17.31% | 15.09% | 15.35% | 19.43% | 14.38% | 17% | 15.9% | 8.45% |
| Operating CF Growth % | 90.6% | 33.34% | 11.27% | -7.1% | 66.3% | 14.14% | 58.12% | 225.19% | - |
| Net Income | 20.02M | 14.31M | 7.21M | 12.76M | 23.68M | 2.91M | -1.26M | -2.06M | -8.25M |
| Depreciation & Amortization | 24.17M | 23.9M | 21.98M | 19.54M | 14.41M | 11.9M | 8.57M | 5.56M | 2.63M |
| Stock-Based Compensation | 17.82M | 16.65M | 14.73M | 14.27M | 11.71M | 8.55M | 5.08M | 2.86M | 645K |
| Deferred Taxes | 6.1M | 4.09M | 885K | -2.46M | -13.83M | -180K | 0 | 0 | -87.06M |
| Other Non-Cash Items | -31.02M | -40.77M | -32.92M | 46.8M | -4.28M | -5.61M | 11.92M | 7.74M | 9.25M |
| Working Capital Changes | 26.13M | 39.23M | 31.17M | -52.22M | 9.97M | 7.47M | -2.37M | -221K | 87.06M |
| Change in Receivables | -325K | -85K | -102K | 3K | -17K | 11K | -5K | 16K | -29K |
| Change in Inventory | -482.44M | -76.39M | -46.96M | -99.87M | -92.13M | -84.87M | -86.6M | -86.75M | 0 |
| Change in Payables | 413K | -3.14M | -1.38M | -787K | 1.46M | 1.64M | 1.02M | 928K | 1.28M |
| Cash from Investing | -24.28M | -42.23M | -34.65M | -26M | -33.97M | -57.71M | -36.51M | -42.42M | -6.02M |
| Capital Expenditures | -25.68M | -24.35M | -18.89M | -21.92M | -18.11M | -17.16M | -16.59M | -13.12M | -5.67M |
| CapEx % of Revenue | 7.1% | 7.34% | 6.62% | 8.69% | 8.44% | 9.85% | 12.85% | 15.04% | 11.22% |
| Acquisitions | 0 | 0 | 0 | -68.3M | -15.6M | -2.23M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | 33.77M | 16.36M | 4.82M | 0 | 130.44M | 109.2M | 45.82M | 4.5M | 8.97M |
| Cash from Financing | -11.04M | 6.65M | 6.29M | 5.49M | 9.01M | 5.73M | 1.14M | 4.73M | 90.02M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -33.77M | -16.36M | -5.37M | -67.78M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -11.04M | 6.65M | 6.29M | 5.49M | 9.01M | 5.73M | 1.14M | 4.73M | 90.02M |
| Net Change in Cash | 27.89M | 21.82M | 14.7M | 18.19M | 16.7M | -26.93M | -13.42M | -23.81M | 88.27M |
| Free Cash Flow | 37.54M | 33.07M | 24.17M | 16.77M | 23.55M | 7.89M | 5.36M | 758K | -1.4M |
| FCF Margin % | 10.37% | 9.97% | 8.47% | 6.65% | 10.98% | 4.53% | 4.15% | 0.87% | -2.77% |
| FCF Growth % | 31.71% | 36.83% | 44.07% | -28.76% | 198.45% | 47.23% | 606.99% | 154.22% | - |
| FCF per Share | 1.13 | 1.01 | 0.77 | 0.54 | 0.76 | 0.26 | 0.19 | 0.03 | -0.15 |
| FCF Conversion (FCF/Net Income) | 1.87x | 4.01x | 5.97x | 3.03x | 1.76x | 8.60x | -17.42x | -6.75x | -0.52x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
High customer acquisition costs
As reported in quarterly filings, the OCF/NI ratio frequently exceeds 3.0, reaching an extreme of 82.53 in 2013Q2, which suggests that reported net income significantly understates the company's actual cash-generating capacity due to heavy non-cash charges and working capital timing differences inherent in the subscription model.
The persistent divergence between net income and operating cash flow indicates that accounting earnings are a poor proxy for the company's liquidity. Investors should monitor whether this gap narrows as the business matures, as a high reliance on non-cash adjustments may obscure the true underlying profitability of the core marketing platform.
Based on historical financial statements, free cash flow margins have fluctuated wildly from a low of 2.3% in 2015Q2 to a peak of 16.6% in 2015Q1, indicating that the company's ability to generate surplus cash is highly sensitive to the timing of marketing investments and operational scaling.
The inconsistency in FCF margins suggests that management prioritizes aggressive customer acquisition over consistent cash flow generation. This volatility warrants further investigation into whether the company can achieve a more stable FCF profile without sacrificing its competitive position in the SMB marketing space.
According to the provided cash flow data, CapEx as a percentage of revenue has consistently hovered between 3.8% and 11.5%, suggesting that the company must continuously reinvest in its technical infrastructure and platform capabilities to maintain its competitive moat against larger, more diversified software competitors.
The sustained level of capital expenditure appears necessary to support the platform's deliverability and multi-channel features. Analysts should consider whether this capital intensity is likely to persist or if future efficiencies in cloud infrastructure could eventually lead to a reduction in the required reinvestment rate.
As indicated by the quarterly cash flow statements, positive working capital changes have been a consistent contributor to operating cash flow, with a notable $17.8 million inflow in 2013Q4, suggesting that the company effectively leverages upfront subscription payments to fund its ongoing operational and marketing requirements.
The reliance on working capital inflows to bolster cash flow may indicate that the company's underlying operational profitability is thinner than it appears. Investors should monitor the sustainability of these inflows, as any shift in billing cycles or customer payment behavior could negatively impact the company's liquidity position.
Quick answers to the most common questions about buying CTCT stock.
Constant Contact, Inc. (CTCT) generated $57.4M in net cash from operating activities in 2014. This reflects the cash generated directly from core business operations.
Constant Contact, Inc. (CTCT) generated $33.1M in free cash flow in 2014. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Constant Contact, Inc. (CTCT) spent $24.3M on capital expenditures in 2014. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2014, Constant Contact, Inc. (CTCT) spent $16.4M on share repurchases. This shows the company's commitment to returning capital to its equity investors.