Free cash flow generation is highly inconsistent, evidenced by extreme swings in FCF margins from a negative 62.7% in 2024Q1 to a peak of 61.2% in 2023Q4, largely driven by unpredictable working capital changes.
| Cash from Operations | 5.87M | 7.39M | 1.2M | 12.72M | 8.59M | 14.05M | 12.96M | 10.16M |
| Operating CF Growth % | -283.99% | 513.88% | -90.54% | 48.2% | -38.89% | 8.4% | 27.54% | - |
| Operating CF / Revenue % | 12.72% | 16.38% | 2.85% | 32.05% | 22.64% | 34.45% | 41.35% | 25.41% |
| Net Income | 8.46M | 7.16M | 6.03M | 8.26M | 8.73M | 17.39M | 8.93M | 13.72M |
| Depreciation & Amortization | 631.47K | 640.25K | 108.19K | 9.4K | 9.89K | 381.17K | 1.06M | 1.04M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 3.15M | 0 | 0 |
| Other Non-Cash Items | 83.48K | 91.22K | -272.92K | 155.07K | -552.28K | -9.07M | 1.13M | 0 |
| Working Capital Changes | -3.31M | -500.41K | -4.66M | 4.3M | 398.19K | 2.2M | 1.84M | -4.59M |
| Cash from Investing | -322.3K | -322.3K | -271.83K | -2.26M | 0 | 6.16M | 0 | -5.01K |
| Acquisitions (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Purchase of Investments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Sale of Investments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 17.86M | 0 | 0 |
| Cash from Financing | 0 | 0 | 7.45M | 39.95M | -652.63K | 1.86M | -4.7M | -13.53M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Common Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Debt Issuance (Net) | 0 | 0 | -1000K | -55K | -1000K | 1000K | -1000K | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 0 | 0 | 0 | 0 | 385.79K | -162K | 0 | -13.53M |
| Net Change in Cash | 14.11M | 14.6M | 5.72M | 46.79M | 5.09M | 22.2M | 9.68M | -4.01M |
| Exchange Rate Effect | 8.56M | 7.53M | -2.67M | -3.62M | -2.85M | 121.78K | 1.43M | -642.21K |
| Cash at Beginning | 118.36M | 103.76M | 98.04M | 51.25M | 46.16M | 23.96M | 14.28M | 18.29M |
| Cash at End | 120.52M | 118.36M | 103.76M | 98.04M | 51.25M | 46.16M | 23.96M | 14.28M |
| Free Cash Flow | 5.55M | 7.07M | 932.25K | 10.46M | 8.59M | 2.36M | 12.96M | 10.16M |
| FCF Growth % | -54.39% | 658.3% | -91.09% | 21.83% | 264.44% | -81.83% | 27.6% | - |
| FCF / Revenue % | 12.02% | 15.66% | 2.2% | 26.35% | 22.64% | 5.78% | 41.35% | 25.39% |
Lumpy project-based cash flows
As reported in financial statements, Wetouch's operating cash flow to net income ratio has fluctuated wildly, ranging from a negative 16.49 in 2024Q1 to a positive 16.51 in 2024Q4, indicating that reported earnings are frequently decoupled from actual cash generation due to project-based revenue recognition cycles.
The extreme variance in the OCF/NI ratio suggests that investors should view net income as a lagging indicator of cash health rather than a reliable proxy for liquidity. This disconnect appears to be driven by the timing of customer payments and inventory build-ups, which can cause significant quarterly distortions in cash conversion.
Based on the company's reported figures, free cash flow margins have exhibited extreme instability, swinging from a negative 62.7% in 2024Q1 to a peak of 61.2% in 2023Q4, reflecting a business model that struggles to maintain consistent cash generation across its project-based delivery schedule.
The lack of a stable FCF trajectory suggests that the company's operational cash flow is highly sensitive to the timing of large-scale industrial deployments. This volatility makes it difficult to forecast long-term cash accumulation, as the business appears to alternate between periods of significant cash inflow and substantial working capital absorption.
According to recent SEC filings, Wetouch's working capital changes have been the primary driver of cash flow variance, with a massive $10.4 million outflow in 2024Q1 followed by a $7.9 million inflow in 2023Q4, highlighting the significant impact of inventory and receivables management on liquidity.
The erratic nature of these working capital shifts suggests that the company's cash position is heavily dependent on the timing of customer acceptance and the subsequent collection of receivables. This pattern warrants close monitoring, as it implies that the company's cash flow is more a function of project milestones than steady-state operational efficiency.
As indicated by historical cash flow data, Wetouch has maintained a massive cash balance with minimal evidence of active capital deployment, save for a $9 million share repurchase in 2024Q4, suggesting a lack of strategic reinvestment or aggressive return of capital to shareholders.
The company's failure to consistently deploy its substantial cash reserves into growth initiatives or sustained shareholder returns may indicate a lack of high-return investment opportunities within its current niche. This idle capital appears to be a structural feature of the balance sheet, potentially limiting the company's overall return on invested capital.
Quick answers to the most common questions about buying WETH stock.
Wetouch Technology Inc. (WETH) generated $7.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Wetouch Technology Inc. (WETH) generated $7.1M 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.
Wetouch Technology Inc. (WETH) spent $0.3M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.