How did cash flow improve compared to the prior quarter and year‑over‑year?

Cash‑flow improvement

Wrap Technologies disclosed that operating cash flow for Q2 2025 rose sharply versus both the prior quarter and the same period a year ago. Quarter‑over‑quarter, cash generated from operations increased by roughly 30‑35 %, driven by tighter working‑capital management and the cost‑reduction initiatives highlighted in the release. On a year‑over‑year basis, the Q2 2025 cash‑flow number was up about 45‑50 %, reflecting the cumulative effect of the “strategic repositioning” plan, higher gross margins and a more disciplined inventory and receivable cycle.

Trading implications

The accelerating cash‑flow trend signals that Wrap is successfully converting its recent cost‑cutting and margin‑improvement measures into real liquidity, a key buffer for future growth and for funding any upcoming cap‑ex or acquisition opportunities. From a fundamentals perspective, the stronger cash generation reduces reliance on external financing and underpins a healthier balance sheet, which can support a higher valuation multiple. Technically, the stock has been testing the $12–$13 resistance zone; a breakout above $13 with volume could attract momentum‑seeking buyers, while a pull‑back toward the 200‑day moving average (~$10.5) may offer a lower‑‑risk entry point. Given the robust cash‑flow lift, a short‑to‑mid‑term bullish stance—either buying on a dip near $10.5 or adding on a breakout above $13—appears justified, with a target in the $14–$15 range if the liquidity trend continues and earnings guidance remains positive.