Persistent operational cash burn is evidenced by a free cash flow margin of -181.1% in 2024Q4, indicating that the firm lacks a self-funding mechanism for its current project-based operations.
| Cash from Operations | -825.48M | -191.73M | -393.86M | -399.74M | 100.27M | 34.52M |
| Operating CF Margin % | - | -43.54% | -219.6% | -858.38% | 21.62% | 15.97% |
| Operating CF Growth % | 4.82% | 51.32% | 1.47% | -498.67% | 190.44% | - |
| Net Income | -871.66M | -256.7M | -336.15M | -382.31M | -602.47M | -70.52M |
| Depreciation & Amortization | 1.93M | 2.01M | 1.08M | 778.61K | 309.51K | 67.93K |
| Stock-Based Compensation | 0 | 0 | 1.62M | 0 | 670M | 56M |
| Deferred Taxes | -62.4K | 0 | -188.5K | 122.26K | 15.98M | -15.91M |
| Other Non-Cash Items | -149.48M | 10.53M | -40.48M | 231K | 244.23K | 684.66K |
| Working Capital Changes | -40.91M | 52.42M | -19.74M | -18.95M | 16.21M | 64.2M |
| Change in Receivables | -5.21M | 54.72M | -9.78M | 41.32M | -31.57M | 54.37M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 45.1M | -6.26M | 0 | 0 | 0 | 0 |
| Cash from Investing | -105.64M | 87.76M | -100.34M | -1.63M | 3.76M | -611.15K |
| Capital Expenditures | -2.04M | -435.09K | -336.19K | -1.63M | -984.37K | -611.15K |
| CapEx % of Revenue | 0.87% | 0.1% | 0.19% | 3.49% | 0.21% | 0.28% |
| Acquisitions | 0 | 0 | 0 | 0 | 4.56M | 0 |
| Investments | - | - | - | - | - | - |
| Other Investing | 0 | -11.8M | 0 | 0 | 187K | 0 |
| Cash from Financing | 574.73M | -119.31M | 644.85M | -78.41M | 189.13M | 91.52M |
| Debt Issued (Net) | -161.93K | -119.31M | -24.05M | 133.75M | -11M | -12M |
| Equity Issued (Net) | 840.88K | 0 | 1000K | 0 | 1000K | 1000K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -227.85M | 0 | -112.3M | -212.16M | 0 | 0 |
| Net Change in Cash | -333.02M | -233.53M | 191.51M | -479.53M | 293.16M | 125.43M |
| Free Cash Flow | -827.52M | -223.97M | -394.2M | -401.36M | 99.28M | 33.91M |
| FCF Margin % | -352.04% | -50.86% | -219.79% | -861.88% | 21.41% | 15.68% |
| FCF Growth % | - | 43.18% | 1.79% | -504.27% | 192.78% | - |
| FCF per Share | -285.77 | -14.86 | -133.49 | -131.86 | 32.62 | 11.14 |
| FCF Conversion (FCF/Net Income) | 0.95x | 0.75x | 1.17x | 1.05x | -0.17x | -0.49x |
| Interest Paid | 0 | 1.48M | 0 | 2.48M | 1.03M | 1.22M |
| Taxes Paid | 0 | 7.95K | 0 | 22.62M | 290K | 173.9K |
Persistent Operating Cash Burn
As reported in financial statements, Earlyworks exhibits a persistent gap between net income and operating cash flow, with OCF/NI ratios fluctuating between 0.83 and 1.14, suggesting that reported losses are consistently mirrored by actual cash outflows rather than being mitigated by non-cash accounting adjustments.
The tight correlation between net losses and operating cash burn indicates that the company's negative profitability is a cash-realized phenomenon rather than an accounting artifact. Investors should monitor this relationship, as the lack of significant non-cash add-backs implies that the business is consuming liquidity at a rate nearly identical to its reported accounting losses.
Based on reported figures, the company's free cash flow trajectory is deeply negative, with FCF margins reaching a trough of -181.1% in 2024Q4, underscoring the significant cash requirements needed to sustain current operations and the absence of a self-funding mechanism within the existing business model.
The consistent and deepening negative FCF trajectory suggests that the company is currently in a high-burn phase where every dollar of revenue growth is accompanied by disproportionate cash consumption. This trend warrants further investigation into whether the company can achieve a pivot toward positive cash generation before its current liquidity reserves are exhausted.
According to recent financial data, working capital changes have been highly erratic, swinging from a $54.7M inflow in 2024Q2 to a $76.5M outflow in 2024Q4, which suggests that the timing of project-based collections and payments is creating significant, unpredictable pressure on the company's available cash position.
The extreme volatility in working capital movements appears to be a direct consequence of the project-based revenue structure, where large, lumpy payments are likely tied to specific milestones. This instability makes it difficult to forecast short-term liquidity needs and suggests that the company's cash position is highly sensitive to the timing of client contract settlements.
As indicated by the provided data, Earlyworks maintains a very low capital intensity, with CapEx/Revenue ratios consistently below 7% and reaching as low as 0.1% in 2024Q4, which suggests that the company's cash burn is driven by operational expenses rather than heavy investment in physical infrastructure.
The low level of capital expenditure relative to revenue implies that the company is not currently burdened by significant maintenance or growth-related asset replacement costs. Instead, the cash burn is almost entirely attributable to the high cost of personnel and R&D, which may indicate that the business model is inherently labor-intensive rather than capital-intensive.
Quick answers to the most common questions about buying ELWS stock.
Earlyworks Co., Ltd (ELWS) generated $-191.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Earlyworks Co., Ltd (ELWS) reported negative free cash flow of $224.0M in 2025, indicating capital requirements exceeded cash from operations.
Earlyworks Co., Ltd (ELWS) spent $0.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.