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💸 Why Cash Flow Matters More Than Headlines in 2025

💸 Why Cash Flow Matters More Than Headlines in 2025

🧠 The One Metric That Keeps You Grounded When the Market Isn’t

Simplify Wall Street
June 19, 2025

The company opening doors to VIP-only markets

StartEngine has unlocked access to a $4.83 trillion asset class that was previously exclusive to billionaires and institutions for almost a century. Now 2.1M users¹ can invest in breakthrough companies before they go public, including coveted pre-IPO companies² like OpenAI and Perplexity.

🏆 StartEngine just had their biggest quarter, with 30M revenue in Q1 2025, more than tripling YoY revenue (Q1 2024 was 9M)
🔓 The platform features initial investments starting at just $1,000 (versus 7-figure VC minimums)
👑 Led by CEO, Howard Marks, co-founder of Activision, and Kevin O’Leary as a strategic advisor

$84M+ has already been invested in StartEngine, but the window is closing soon. Until June 26, you can still secure your hares at this price.

Invest in StartEngine now and claim up to 20% bonus shares

Onto Thursday’s quick read by Simplify Wall Street.

💸 Why Cash Flow Matters More Than Headlines in 2025

👀 What Most People Focus On:

Big headlines: “AI is the future!”
Market drama: “Recession fears!”
Hype stocks: “This startup will 10x!”

🧠 What Smart Investors Focus On:

Cash flow.
Because if a company doesn’t make real money, it can’t survive.

📘 What Is Cash Flow?

Think of it like your paycheck.
After bills, rent, and groceries — what’s left over is your free cash.
That’s what you can save, invest, or spend freely.

Companies have the same thing.
Free Cash Flow (FCF) = the money left after running the business and paying for equipment.

🛑 Why Cash Flow Is Everything in 2025

Inflation, war, interest rates, political tension — it’s a mess out there.
But cash-flow-positive companies don’t need bailouts, risky loans, or stock sales to survive.

When times get rough:

✅ They pay their bills
✅ They keep growing
✅ They don’t lay off workers
✅ They keep rewarding shareholders

🔍 Why It Matters in 2025

We're in a weird market right now. Tech stocks are popping, yet half of America feels like we’re in a recession. You’ve got global chaos, inflation that won’t quit, and bond yields draining investor attention.

In moments like this, investors often chase the wrong signals. But strong cash-flow-generating businesses are what survive — and thrive — through every cycle.

💼 Case Study #1: Costco ($COST)

In 2008, while other retailers collapsed, Costco’s cash flow stayed positive.
They didn’t chase fads. They protected margins.
Today? They’re one of the most recession-resilient stocks with consistent FCF growth.

📊 Free Cash Flow in 2024: ~$7.5 billion
🧱 Balance Sheet: Nearly debt-free
💸 Dividend: Yes — and growing

💻 Case Study #2: Adobe ($ADBE)

People worry about AI disrupting creative software, but Adobe keeps printing cash.
Why? Subscription model + pricing power.
Even during the pandemic, FCF held strong.

📊 FCF (TTM): $7.2 billion
💳 Gross Margins: ~87%
🧠 They invest in R&D without burning through cash reserves

🛡️ Case Study #3: Northrop Grumman ($NOC)

Defense budgets are sticky. Governments don’t cancel fighter jets during recessions.
Northrop has strong cash flows and contract pipelines insulated from consumer mood swings.

📊 FCF: ~$2.6 billion
⚔️ Sector: Defense (Less cyclical than tech or retail)
✅ Outlook: Strong backlog, dividend grower, cash-rich

🧨 Meanwhile… The Dangers of Cash Burners

Think of names like:

$NKLA (Nikola)
$CVNA (Carvana)
$PLUG (Plug Power)

All made headlines…
All raised money through hype…
All struggled because their cash flow was negative when the economy tightened.

🚩 They rely on cheap debt and optimistic projections.
🚩 When rates go up or sentiment shifts, they scramble.

🔎 What to Look For (as an everyday investor)

Here’s your simple checklist:

✅ Positive Free Cash Flow (3+ years running)
✅ Low debt relative to cash on hand
✅ High return on invested capital (ROIC)
✅ Margin resilience (can they raise prices or cut costs?)

If a company checks these boxes, they’re built to last — and that’s what 2025 demands.

In 2025, don’t chase trends.
Chase cash flow.

Because when everyone else is reacting to headlines…
The companies still printing real money are the ones still standing.

More Posts Here.

_DISCLAIMER:

_{1. Count determined as number of unique email addresses in StartEngine’s database as of 03-07-2025. One individual may have more than one email address. Note that in In May 2023, StartEngine acquired assets of SeedInvest, including email lists for SeedInvest’s users, investors, and founders.}

_{2. The underlying companies held by StartEngine Private Funds LLC, and StartEngine Private LLC (together, “StartEngine Private”) are not participating or involved in the offering. The availability of company information does not indicate that the company has endorsed, supports or otherwise participates with StartEngine Private or any of its affiliates. StartEngine Crowdfunding LLC purchases shares from current and former employees, early investors, and advisors of the companies and sells the shares to StartEngine Private for each offering. When you make an investment in a company on StartEngine Private, you are purchasing an interest in a series of StartEngine Private Funds LLC or StartEngine Private LLC, each a Delaware limited liability company (together the “Series LLCs”), which were created to hold shares of privately held companies. An investor will not directly own or hold shares of the private company but instead will own member interests in a series of the Series LLCs, which either directly or indirectly, will hold shares in the company. There may not be a one-to-one economic parity on the value of the Series LLCs interests and the underlying shares.}

_{3. Based on our 2024 Form 10-K. This revenue growth has been driven by StartEngine Private, a new product line that offers funds in late stage companies. This product line has driven over $28 million of the $48 million in revenue from 2024. Net loss also increased to $16.5 million. To understand the impact on margins,}_{see financials}_.

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