Cash generation remains strained, as evidenced by a $205.2 million working capital outflow in 2025Q4 that contributed to a $138.5 million negative free cash flow.
| Cash from Operations | -94.66M | -243.67M | -107.44M | 136.21M | -1.02B | -983.37M | -6.18M | -96.21M |
| Operating CF Margin % | -2.26% | -7.08% | -3.15% | 3.61% | -17.7% | -19.88% | -0.2% | -14.57% |
| Operating CF Growth % | 61.15% | -126.79% | -178.88% | 113.35% | -3.77% | -15814.68% | 93.58% | - |
| Net Income | -92.41M | -710.22M | -750.23M | -821.33M | -1.55B | -2.69B | 75.36M | -40.12M |
| Depreciation & Amortization | 146.08M | 0 | 203.41M | 339.26M | 427.26M | 263.87M | 67.67M | 4.12M |
| Stock-Based Compensation | 59.03M | 91.17M | 77.5M | 340.86M | 530.44M | 1.9B | 75M | 14.03M |
| Deferred Taxes | 1.44M | 0 | -8.65M | -8.36M | -5.43M | 3.45M | -3.69M | 2.29M |
| Other Non-Cash Items | -3.59M | 574M | 309.02M | 55.73M | 104.74M | 39.53M | 1.76M | 4.68M |
| Working Capital Changes | -205.21M | -198.62M | 61.52M | 230.05M | -530.41M | -502.39M | -222.27M | -81.21M |
| Change in Receivables | 4.95M | -5.24M | -4.47M | 155M | 99.75M | -154.01M | -200.55M | -59.93M |
| Change in Inventory | -124.79M | -11.16M | 109.44M | 278M | -109.93M | -134.25M | -411.11M | -77.79M |
| Change in Payables | 77.28M | -33.6M | -14.16M | -120.97M | -244.44M | 66.16M | 310.32M | 81.2M |
| Cash from Investing | 246.79M | 592.12M | -260.49M | -1.16B | -1.48B | -508.83M | -148.17M | -7.88M |
| Capital Expenditures | -42.06M | -52.74M | -43.65M | -59.33M | -166.74M | -384.58M | -108.76M | -4.88M |
| CapEx % of Revenue | 1.01% | 1.53% | 1.28% | 1.57% | 2.89% | 7.77% | 3.6% | 0.74% |
| Acquisitions | 0 | -42M | -121.55M | -137.95M | -1.32B | -134.72M | -29.41M | -3M |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 2.38M | -2.18M | 1.63M | 4.1M | 0 | -158.54M | 0 | -4.05M |
| Cash from Financing | -151.44M | -394.23M | -342.45M | -654.45M | -1.71M | 6.68B | 795.23M | 123.68M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | -100K | 0 | 0 | 2.9M |
| Equity Issued (Net) | -105.53M | -405.79M | -212.69M | -654.65M | -15.16M | -491.17M | -47.26M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -111.02M | -405.79M | -212.69M | -654.65M | -15.16M | -491.17M | -117.56M | 0 |
| Other Financing | -45.92M | 11.57M | -129.76M | 200K | 13.55M | 7.17B | 842.49M | 120.78M |
| Net Change in Cash | -9.9M | -40.74M | -696.19M | -1.58B | -2.6B | 5.06B | 651.52M | 20.38M |
| Free Cash Flow | -138.46M | -300.69M | -151.41M | 76.88M | -1.19B | -1.37B | -114.94M | -101.08M |
| FCF Margin % | -3.31% | -8.74% | -4.43% | 2.04% | -20.6% | -27.65% | -3.8% | -15.31% |
| FCF Growth % | 53.95% | -98.59% | -296.94% | 106.48% | 13.21% | -1090.15% | -13.71% | - |
| FCF per Share | -1.49 | -2.97 | -1.38 | 0.68 | -9.40 | -10.83 | -0.85 | -0.75 |
| FCF Conversion (FCF/Net Income) | 1.20x | 0.34x | 0.14x | -0.16x | 0.67x | 0.39x | -0.08x | 2.31x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 93K | 0 | 0 |
| Taxes Paid | 4.9M | 2.91M | 7.75M | 6.11M | 6.19M | 59.44M | 0 | 0 |
High customer acquisition costs
According to recent financial filings, YSG reported a net income of $8.0 million in 2025Q4, yet simultaneously generated an operating cash outflow of $94.7 million, highlighting a significant disconnect between accounting profitability and the actual cash-generating capacity of the company's core beauty operations.
The stark divergence between net income and operating cash flow suggests that reported earnings are heavily influenced by non-cash items or accounting adjustments rather than realized cash inflows. Investors should monitor whether this negative conversion is a recurring structural feature of the business model or a temporary byproduct of aggressive inventory management.
Based on the 2025Q4 cash flow statement, YSG experienced a substantial $205.2 million outflow related to working capital changes, which appears to be the primary driver behind the company's inability to convert its reported net income into positive operating cash flow for the period.
This massive working capital drain suggests that the company may be struggling with inventory accumulation or inefficient collection cycles during its peak promotional seasons. Such volatility in working capital warrants further investigation into whether the company is over-producing stock in anticipation of demand that fails to materialize in cash.
As reported in recent financial statements, YSG utilized $111.0 million for share repurchases in 2025Q4, a move that appears counterintuitive given the company's simultaneous $94.7 million operating cash outflow and the broader trend of cash burn observed across the fiscal year.
The decision to prioritize share buybacks while the core business is consuming cash suggests a management focus on supporting the equity price rather than reinvesting in operational efficiency. This capital allocation strategy may indicate a lack of high-return internal projects, raising questions about the long-term sustainability of such outflows.
Analysis of the 2025Q4 cash flow data reveals that stock-based compensation of $26.4 million continues to be a significant non-cash add-back, which effectively masks the true economic cost of the human capital required to maintain YSG's competitive position in the Chinese beauty market.
By relying on equity-based incentives, the company avoids immediate cash outlays but dilutes existing shareholders to fund its operations. This practice suggests that the company's underlying cash burn is likely higher than the headline operating cash flow figures might otherwise imply to a casual observer.
Quick answers to the most common questions about buying YSG stock.
Yatsen Holding Limited (YSG) generated $-94.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Yatsen Holding Limited (YSG) reported negative free cash flow of $138.5M in 2025, indicating capital requirements exceeded cash from operations.
Yatsen Holding Limited (YSG) spent $42.1M 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, Yatsen Holding Limited (YSG) spent $111.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.