Operational efficiency has deteriorated, evidenced by a negative free cash flow margin of -40.1% in 2025Q4 and a $2.6 million drain from working capital changes.
| Cash from Operations | -3.17M | -15.88M | 6.73M | -4.15M | 4.64M | -7.93M | 533.41K |
| Operating CF Margin % | -13.85% | -52.4% | 33.11% | -15.43% | 24.92% | -56.13% | 5.96% |
| Operating CF Growth % | 80.06% | -335.92% | 262.12% | -189.41% | 158.57% | -1586.01% | - |
| Net Income | -1.39M | -1.12M | 1.22M | 3.48M | 3.39M | 2.21M | 951.18K |
| Depreciation & Amortization | 1.26M | 1.12M | 902.69K | 793.59K | 761.48K | 148.19K | 119.14K |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 26.64K | -70.35K | 0 | 0 | -30.63K | -648 | 27.18K |
| Other Non-Cash Items | 45.87K | 632.32K | 136.35K | -4.55K | 120.2K | -6.15M | 206.54K |
| Working Capital Changes | -3.11M | -16.44M | 4.47M | -8.42M | 397.19K | -4.14M | -770.63K |
| Change in Receivables | -3.39M | -7.61M | 3.4M | -8.55M | 3.38M | -4.08M | 248.67K |
| Change in Inventory | -119.55K | -2.3M | -1.09M | -2.66M | -2.2M | -329.44K | -427.05K |
| Change in Payables | -2.4M | 2.64M | 1.09M | 661.08K | 803.61K | 274.72K | -605.23K |
| Cash from Investing | -12.37M | -971.81K | -1.38M | -4.9M | -244.17K | -186.01K | -370.28K |
| Capital Expenditures | -5.24M | -517.81K | -684.21K | -694.81K | -244.17K | -186.01K | -370.28K |
| CapEx % of Revenue | 22.92% | 1.71% | 3.37% | 2.58% | 1.31% | 1.32% | 4.14% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - |
| Other Investing | -2.6M | -37.08K | 3.18M | -4.2M | 0 | 0 | 0 |
| Cash from Financing | 14.27M | 12.38M | -6.44M | 11.32M | -3.4M | 10.93M | 593.66K |
| Debt Issued (Net) | 6.93M | 3.07M | -8.34M | 1.15M | -2.53M | 9.7M | 1.42M |
| Equity Issued (Net) | 9.27M | 8M | 0 | 10.08M | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.94M | 1.32M | 1.9M | 85.13K | -861.52K | 1.23M | -824.34K |
| Net Change in Cash | -888.02K | -4.55M | -1.19M | 1.89M | 1.11M | 3.05M | 747.67K |
| Free Cash Flow | -11M | -16.43M | 6.02M | -4.85M | 4.4M | -8.11M | 163.13K |
| FCF Margin % | -48.14% | -54.23% | 29.62% | -18.01% | 23.61% | -57.45% | 1.82% |
| FCF Growth % | 33.04% | -372.96% | 224.22% | -210.17% | 154.22% | -5073.18% | - |
| FCF per Share | -2159.63 | -1.10 | 0.50 | -0.40 | 0.37 | -0.68 | 0.01 |
| FCF Conversion (FCF/Net Income) | 2.28x | 14.23x | 5.52x | -1.19x | 1.37x | -3.58x | 0.56x |
| Interest Paid | 279.68K | 148.34K | 0 | 831.75K | 365.75K | 94.63K | 39.26K |
| Taxes Paid | 12.39K | 178.69K | 0 | 123.61K | 99.69K | 26.67K | 17.53K |
Severe liquidity and solvency
As reported in financial statements, RAYA exhibits a persistent disconnect between net income and operating cash flow, with the company reporting negative operating cash flow of $2.4 million in 2025Q4 despite net losses, suggesting significant accrual-based volatility that complicates the assessment of true underlying earnings quality.
The recurring divergence between net income and operating cash flow suggests that the company's reported earnings are not being supported by cash generation. Investors should monitor whether this trend reflects aggressive revenue recognition or simply the inability to convert sales into liquid assets during a period of contraction.
Based on EDBL's reported figures, the free cash flow trajectory has deteriorated sharply, reaching a negative 40.1% margin in 2025Q4, which highlights the company's inability to fund its capital requirements through internal operations while simultaneously managing a shrinking revenue base in its core markets.
The consistent negative free cash flow indicates that the business model is currently consuming rather than generating capital. This trajectory warrants further investigation into whether the company can achieve a sustainable cash-flow-positive state without significant external financing or a drastic reduction in operating overhead.
According to recent SEC filings, RAYA's capital expenditure reached 23.7% of revenue in 2025Q4, a concerning level of capital intensity that appears disproportionate given the company's ongoing revenue contraction and the lack of clear evidence regarding the return on these specific asset investments.
High capital intensity during a downturn suggests that the company may be attempting to force growth or maintain manufacturing capabilities that are currently underutilized. This strategy appears to be placing undue pressure on the company's already strained liquidity position.
As indicated by the cash flow data, working capital changes have been a consistent drain on liquidity, with a $2.6 million outflow in 2025Q4 alone, suggesting that the company is struggling to manage its collection cycles and inventory levels effectively in a cooling demand environment.
The persistent negative impact of working capital on cash flow may indicate that the company is forced to offer extended payment terms to distributors to maintain sales volume. This practice appears to be exacerbating the company's liquidity constraints and limiting its operational flexibility.
Quick answers to the most common questions about buying RAYA stock.
Erayak Power Solution Group Inc. (RAYA) generated $-3.2M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Erayak Power Solution Group Inc. (RAYA) reported negative free cash flow of $11.0M in 2025, indicating capital requirements exceeded cash from operations.
Erayak Power Solution Group Inc. (RAYA) spent $5.2M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.