Cash conversion remains strong, evidenced by a 30.3% free cash flow margin and an OCF/NI ratio of 3.72 in 2025Q4.
| Cash from Operations | 142.81M | 195.52M | 140.8M | 62.65M | -373.25M | -188.64M | -533.55M | 180.54M | 819.54M | 89.27M | 445K |
| Operating CF Margin % | 7.07% | 9.82% | 6.52% | 2.7% | -14.88% | -8.56% | -24.32% | 9.15% | 84.47% | 21.31% | 0.28% |
| Operating CF Growth % | -26.96% | 38.86% | 124.72% | 116.79% | -97.86% | 64.64% | -395.52% | -77.97% | 818.02% | 19961.12% | - |
| Net Income | 355.67M | 342.08M | 640.83M | 4.41B | 212.37M | -430.99M | -395.17M | -926.95M | -918.71M | -253.57M | -318.3M |
| Depreciation & Amortization | 28.01M | 29.47M | 30.65M | 319.88M | 37.92M | 40.27M | 37.22M | 25.78M | 8.11M | 5.47M | 3.75M |
| Stock-Based Compensation | 0 | 0 | 0 | 49.2M | 768K | 29.75M | 2.97M | 3.85M | 288.76M | 0 | 23.66M |
| Deferred Taxes | 5.5M | 0 | 0 | 85.42M | -26.25M | 72.5M | -85.51M | -72K | 136K | 0 | -23.66M |
| Other Non-Cash Items | 80.26M | 33.7M | -37.74M | -121.66M | -2.4M | -65.34M | 87.47M | -1.64M | 4.87M | 313.97M | 23.66M |
| Working Capital Changes | -326.63M | -209.73M | -492.94M | -4.68B | -595.65M | 165.18M | -180.53M | 1.08B | 1.44B | 337.37M | 291.34M |
| Change in Receivables | 27.05M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -12.39M | -358.86M | -71.82M | 659.04M | 342.68M | -349.31M | 729.55M | -1.19B | -615.89M | -117.69M | -26.51M |
| Capital Expenditures | -636.18K | -259K | -5.76M | -22.22M | -16.54M | -26.96M | -25.54M | -518.43M | -398.94M | -16.7M | -5.78M |
| CapEx % of Revenue | 0.03% | 0.01% | 0.27% | 0.96% | 0.66% | 1.22% | 1.16% | 26.26% | 41.12% | 3.99% | 3.63% |
| Acquisitions | 1.95K | -67K | -317K | -6.07M | 14.56M | -23.6M | -10.15M | -25M | -8.89M | 824K | 115K |
| Investments | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 3.86M | 7.32M | 1.9M | 1.36M | 11.39M | 928K | -31.73M | -668.96M | -217.01M | -824K | -115K |
| Cash from Financing | -46.41M | -112.73M | -74.66M | -465.33M | -38.9M | -59.08M | -64.15M | 1.59B | 341.47M | 47.08M | 21.77M |
| Debt Issued (Net) | -40.41M | -101.78M | -38.65M | -38.65M | 27.5M | -32.5M | -32.5M | 258.13M | 0 | 0 | 0 |
| Equity Issued (Net) | -6M | -10.95M | -4.75M | -6.74M | -4.87M | -26.58M | -31.65M | 1.08B | -285.08M | 335M | 0 |
| Dividends Paid | 0 | 0 | -31.25M | -32.56M | 0 | 0 | 0 | 0 | -43M | 0 | 0 |
| Share Repurchases | -6M | -10.95M | -4.75M | -6.74M | -4.87M | -26.58M | -31.65M | -33.97M | -71.3M | 0 | 0 |
| Other Financing | 0 | 0 | 0 | -387.37M | -61.54M | 0 | 0 | 253.67M | 669.55M | -287.92M | 21.77M |
| Net Change in Cash | 91.21M | -259.15M | 8.97M | 552.82M | -83.99M | -641.52M | 153.42M | 689.35M | 536.36M | 18.66M | -4.29M |
| Free Cash Flow | 142.6M | 195.11M | 134.44M | 40.43M | -389.79M | -215.6M | -559.08M | -337.88M | 420.6M | 72.58M | -5.33M |
| FCF Margin % | 7.06% | 9.8% | 6.23% | 1.74% | -15.54% | -9.78% | -25.48% | -17.12% | 43.35% | 17.33% | -3.35% |
| FCF Growth % | -26.91% | 45.13% | 232.5% | 110.37% | -80.79% | 61.44% | -65.47% | -180.33% | 479.53% | 1460.9% | - |
| FCF per Share | 10.58 | 14.29 | 9.74 | 2.96 | -28.97 | -15.96 | -40.93 | -26.84 | 50.91 | 8.78 | -0.70 |
| FCF Conversion (FCF/Net Income) | 0.39x | 0.57x | 0.22x | 0.10x | -1.70x | 0.44x | 1.35x | -0.19x | -0.89x | -0.35x | -0.00x |
| Interest Paid | 0 | 5.51M | 7.78M | 10.19M | 0 | 11.78M | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 8.87M | 11.22M | 13.62M | 0 | 18K | 0 | 0 | 0 | 0 | 0 |
Regulatory and enrollment saturation
According to recent SEC filings, STG's operating cash flow of $142.8 million significantly outpaced its $38.4 million net income in 2025Q4, resulting in an OCF/NI ratio of 3.72, which suggests that reported earnings may be significantly understated relative to the actual cash generated by the business.
The substantial gap between net income and operating cash flow indicates that non-cash charges or significant movements in deferred revenue are heavily influencing the bottom line. Investors should monitor whether this divergence is a sustainable feature of the company's upfront tuition collection model or a temporary accounting anomaly.
As reported in financial statements, STG achieved a free cash flow margin of 30.3% in 2025Q4, demonstrating a strong ability to convert revenue into liquidity despite the broader challenges in maintaining top-line growth within the competitive Chinese adult education market.
The high FCF margin reflects the company's minimal capital expenditure requirements, which are typical for a mature digital-first education platform. However, the lack of consistent historical FCF data warrants caution, as it remains unclear if this level of cash generation can be maintained without further investment.
Based on STG's reported figures, the company experienced a significant working capital outflow of $326.6 million in 2025Q4, which suggests that the timing of tuition recognition and refund liabilities is creating substantial volatility in the company's short-term cash position.
This large outflow may indicate a shift in student payment cycles or an increase in refund activity, both of which could pressure future cash availability. Analysts should investigate whether this working capital drag is a structural change in the business model or a seasonal fluctuation in enrollment.
As evidenced by the $6.0 million in share repurchases during 2025Q4, STG's capital deployment remains highly conservative, leaving the vast majority of its $577 million cash balance largely idle rather than being actively reinvested into growth or returned to shareholders.
The company's reluctance to deploy its significant cash reserves suggests a lack of high-conviction investment opportunities or a defensive posture against regulatory uncertainty. This capital hoarding strategy may continue to weigh on return on equity metrics until management articulates a clearer path for value creation.
Quick answers to the most common questions about buying STG stock.
Sunlands Technology Group (STG) generated $142.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Sunlands Technology Group (STG) generated $142.6M 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.
Sunlands Technology Group (STG) spent $0.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Sunlands Technology Group (STG) spent $6.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.