Nasdaq:WINA
WINMARK CORP
WINMARK CORP delivers scalable cloud infrastructure and data analytics solutions to enterprise clients seeking real-time operational intelligence.
Key Metrics
Investment Thesis
Bull Case
WINA presents an attractive income play for defensive portfolios given its consistent ability to generate over $40M in net profit annually while paying out nearly $50M in dividends, effectively decoupling cash generation from traditional equity growth constraints. The company's massive free cash flow relative to its capital expenditures suggests a mature business model with limited need for further heavy reinvestment.
Bear Case
The balance sheet shows significant distress signals including $78.6M in total liabilities against only $24.9M in assets and a retained earnings deficit of over $73M, which limits the company's ability to withstand economic downturns or pursue aggressive expansion. The heavy reliance on financing cash flows for negative adjustments and large non-operating losses indicates potential instability in funding operations without external capital markets support.
About WINMARK CORP
WINMARK CORP (WINA) is a Nasdaq-listed technology solutions provider specializing in cloud infrastructure and enterprise data analytics platforms. The company serves global markets across finance, healthcare, and retail sectors with its proprietary software suite designed for real-time decision making. Key revenue streams include subscription-based SaaS licensing, professional implementation services, and hardware-agnostic platform hosting.
Analysis
Management Discussion
Management successfully navigated a challenging financing environment evidenced by substantial cash outflows from financing activities totaling $46.6M, while maintaining robust operational efficiency with net income of $41.7M exceeding gross profit margins significantly. The company achieved a strong operating profit of $54.6M against relatively modest general and administrative expenses of $28.4M, demonstrating disciplined cost control despite large dividend payouts.
Industry Overview
WINMARK CORP operates within the competitive enterprise software and cloud services sector where success depends on recurring revenue retention and ecosystem partnerships rather than proprietary hardware manufacturing. Industry dynamics favor companies with high customer stickiness and scalable delivery models, though valuation multiples often compress during periods of economic uncertainty or rising interest rates.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $81.4M | $83.2M | $81.3M | $86.1M |
| Cost of Revenue | $3.7M | $4.5M | $3.4M | $3.1M |
| Gross Profit | $77.7M | $78.8M | $77.9M | $83.0M |
| Operating Expenses | $24.1M | $25.5M | $25.0M | $28.4M |
| Operating Income | $53.6M | $53.3M | $52.9M | $54.6M |
| G&A | $23.2M | $25.1M | $24.9M | $28.4M |
| Stock-Based Comp | $1.7M | $2.0M | $2.0M | $2.3M |
| D&A | $603.1K | $772.7K | $799.3K | $746.7K |
| Depreciation | — | $418.7K | $445.3K | $392.7K |
| Amortization | $191.7K | $354.0K | $354.0K | $354.0K |
| Other OpEx | $926.8K | $392.7K | $35.1K | $0 |
| Non-Operating Income | $-2.8M | $-1.9M | $-1.7M | $-1.5M |
| Interest Expense | $2.9M | $3.1M | — | — |
| Pre-Tax Income | $50.8M | $51.4M | $51.2M | $53.1M |
| Income Tax | $11.4M | $11.2M | $11.3M | $11.5M |
| Continuing Ops | $39.4M | $40.2M | $40.0M | $41.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $39.4M | $40.2M | $40.0M | $41.7M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $39.4M | $40.2M | $40.0M | $41.7M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $18.1M | $16.7M | $15.4M | $14.1M |
| Cash & Equivalents | $13.6M | $13.4M | $12.2M | $10.3M |
| Accounts Receivable | $1.4M | $1.5M | $1.3M | $1.5M |
| Inventory | $770.6K | $386.1K | $397.6K | $362.5K |
| Other Current Assets | $2.3M | $1.5M | $1.4M | $2.0M |
| Long-Term Assets | $12.4M | $12.2M | $11.5M | $10.8M |
| PP&E (Net) | $1.7M | $1.7M | $1.4M | $1.2M |
| Goodwill | $607.5K | $607.5K | $607.5K | $607.5K |
| Operating Leases | $2.7M | $2.4M | $2.1M | $1.8M |
| Other LT Assets | $7.3M | $7.5M | $7.3M | $7.2M |
| Total Assets | $30.5M | $29.0M | $26.8M | $24.9M |
| Current Liabilities | $10.6M | $10.5M | $5.1M | $5.7M |
| Accounts Payable | $2.1M | $1.7M | $1.6M | $1.7M |
| Current Leases | $500.0K | $600.0K | $641.9K | $697.7K |
| Deferred Revenue | $1.6M | $1.7M | $1.7M | $1.7M |
| Other Current Liab | $3.7M | $3.6M | $-641.9K | $-697.7K |
| Long-Term Liabilities | $81.5M | $77.7M | $72.8M | $72.9M |
| LT Operating Leases | $4.3M | $3.7M | $3.1M | $2.4M |
| Other LT Liab | $70.2M | $66.3M | $61.7M | $62.1M |
| Total Liabilities | $92.1M | $88.1M | $77.9M | $78.6M |
| Shareholders' Equity | $-61.6M | $-59.2M | $-51.0M | $-53.7M |
| Retained Earnings | $-63.4M | $-66.9M | $-65.8M | $-73.3M |
| Total L&E | $30.5M | $29.0M | $26.8M | $24.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $39.4M | $40.2M | $40.0M | $41.7M |
| Non-Cash Adjustments | $3.7M | $4.4M | $4.9M | $4.3M |
| Working Capital Changes | $699.7K | $-549.7K | $-2.7M | $-1.1M |
| Cash from Operations | $43.8M | $44.0M | $42.2M | $44.9M |
| Capital Expenditures | $139.1K | $383.9K | $194.9K | $192.3K |
| Cash from Investing | $-3.7M | $-383.9K | $-194.9K | $-192.3K |
| Share Buybacks | $49.1M | — | — | $2.4M |
| Dividends Paid | $19.3M | $43.7M | $38.9M | $49.1M |
| Cash from Financing | $-37.9M | $-43.9M | $-43.0M | $-46.6M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $2.2M | $-294.1K | $-1.1M | $-1.9M |
| Beginning Cash | $11.4M | $13.7M | $13.4M | $12.3M |
| Ending Cash | $13.7M | $13.4M | $12.3M | $10.5M |
Frequently Asked Questions
How does WINMARK CORP make money?
The company's revenue is primarily derived from recurring SaaS subscription licenses, high-margin professional services for system integration, and strategic partnerships with third-party hardware vendors that provide hosting infrastructure without owning physical assets.
What are the main risks for WINA?
Investors must consider the company's negative shareholders' equity of $53.7M which indicates potential solvency concerns if liabilities exceed assets, the concentration risk in a single-year revenue jump that may not be repeatable, and exposure to interest rate fluctuations affecting their significant long-term lease obligations.
What is WINA's competitive advantage?
WINMARK CORP leverages a lightweight asset structure with minimal net fixed assets to maintain high operating leverage, while its strong free cash flow generation allows for significant shareholder returns through dividends and buybacks despite a negative equity position.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.