Operational liquidity remains strained, evidenced by a 2025Q4 OCF/NI ratio of 0.34 and a negative free cash flow margin of -6.4%.
| Cash from Operations | -15.43M | 14.1M | -13.54M | 4.45M | 18.58M | 2.43M |
| Operating CF Margin % | -8.03% | 7.74% | -8.27% | 3.26% | 15.81% | 21.2% |
| Operating CF Growth % | -209.43% | 204.12% | -404% | -76.03% | 665.36% | - |
| Net Income | -18.45M | 10.65M | 9.8M | 992.38K | 747.01K | 1.59M |
| Depreciation & Amortization | 3.7M | 3.24M | 2.69M | 3.6M | 4.12M | 418.59K |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -835.84K | 393.43K | -1.72M | 0 | 0 | 0 |
| Other Non-Cash Items | 15.2M | -592.28K | 8.96M | 983.19K | 235.64K | 110.15K |
| Working Capital Changes | -15.04M | 400.52K | -33.29M | -1.13M | 13.48M | 311.39K |
| Change in Receivables | -12.04M | 11.7M | -2.35M | 539.88K | -404.08K | -1.6M |
| Change in Inventory | 19.23M | -6.97M | -2.33M | -606.32K | -447.44K | -557.78K |
| Change in Payables | -1.34M | -8.81M | 1.74M | -174.91K | -216.62K | 1.86M |
| Cash from Investing | -1.64M | -3.25M | -112.16K | -2.25M | 14.87M | -3.89M |
| Capital Expenditures | -1.64M | -3.02M | -775.12K | -293.77K | -372.3K | -3.45M |
| CapEx % of Revenue | 0.85% | 1.66% | 0.47% | 0.22% | 0.32% | 30.13% |
| Acquisitions | 0 | 0 | -1K | 6.14K | 2.29M | -125.37K |
| Investments | - | - | - | - | - | - |
| Other Investing | 0 | -227K | 663.96K | -1.96M | 12.95M | -313.31K |
| Cash from Financing | 90 | 25.18M | 4.79M | -8.07M | -16.55M | 69.34K |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | -4.9M | 0 |
| Equity Issued (Net) | 90 | 25.18M | 4.96M | 0 | 8M | 0 |
| Dividends Paid | 0 | 0 | 0 | -8M | -16.95M | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 0 | 0 | -173.15K | -71.76K | -2.7M | 69.34K |
| Net Change in Cash | -27.07M | 35.94M | -8.79M | -5.9M | 16.88M | -1.39M |
| Free Cash Flow | -17.07M | 10.85M | -14.32M | 275.61K | 2.02M | -1.02M |
| FCF Margin % | -8.89% | 5.96% | -8.75% | 0.2% | 1.72% | -8.93% |
| FCF Growth % | -257.25% | 175.81% | -5293.96% | -86.37% | 297.73% | - |
| FCF per Share | -12.33 | 0.83 | -1.19 | 0.02 | 0.15 | -0.20 |
| FCF Conversion (FCF/Net Income) | 0.84x | 1.32x | -1.40x | 0.57x | 3.20x | 1.53x |
| Interest Paid | 0 | 19.63K | 38.34K | 43.6K | 195.75K | 0 |
| Taxes Paid | 0 | 4.04M | 5.44M | 4.04M | 592.57K | 0 |
Persistent operational cash burn
As reported in recent financial statements, SUGP's operating cash flow consistently fails to track with net income, evidenced by a 2025Q4 OCF/NI ratio of 0.34, which suggests that accounting profits are not translating into actual liquidity for the firm's core security operations.
The persistent gap between net income and operating cash flow indicates that the company's earnings are heavily reliant on non-cash items or accruals that do not materialize into cash. Investors should monitor whether this divergence is a result of aggressive revenue recognition or simply the high working capital requirements inherent in the Hong Kong security services market.
Based on the company's reported figures, the free cash flow trajectory has remained firmly in negative territory, with a 2025Q4 FCF margin of -6.4%, highlighting the ongoing struggle to fund operations through internal cash generation rather than existing balance sheet reserves.
The consistent negative FCF trajectory suggests that the business model is currently capital-consuming rather than capital-generative. This trend warrants further investigation into whether the company can achieve a positive FCF inflection point without further dilutive financing or significant operational restructuring.
According to historical cash flow data, working capital changes have been a significant drag on liquidity, with a notable $12.4 million outflow observed in 2023, indicating that the firm's collection cycles and inventory management are highly inefficient relative to its operational scale.
The erratic nature of working capital swings suggests that the company may be facing challenges in managing its receivables or is forced to carry significant unbilled contract assets. Such volatility in cash conversion cycles makes it difficult to forecast the timing of cash inflows, increasing the risk of liquidity crunches during periods of revenue growth.
As indicated by recent filings, SUGP has maintained a conservative capital deployment strategy with no dividends or buybacks, instead utilizing cash for minor acquisitions and equipment investments, which appears to be a defensive posture given the company's current inability to generate positive operating cash flow.
While the lack of shareholder returns is understandable given the negative cash flow profile, the deployment of cash into acquisitions may be premature if the core business has not yet reached a sustainable profitability threshold. Investors should monitor whether these capital outlays provide a tangible return on investment or merely serve to mask the underlying operational inefficiencies.
Quick answers to the most common questions about buying SUGP stock.
SU Group Holdings Limited Ordinary Shares (SUGP) generated $-15.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
SU Group Holdings Limited Ordinary Shares (SUGP) reported negative free cash flow of $17.1M in 2025, indicating capital requirements exceeded cash from operations.
SU Group Holdings Limited Ordinary Shares (SUGP) spent $1.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.