ADC Therapeutics S.A. (ADCT) Cash Flow Statement

The dispersion itself is the signal: in 2025Q4 a $6.4M net loss coincided with a $31.1M operating outflow as working capital absorbed $11.9M, whereas in 2026Q2 a larger $16.6M net loss produced only an $11.8M outflow as $10.9M of working capital was released. This suggests the accrual profile, rather than any improvement in the underlying economics, is what investors should track quarter to quarter. Cumulatively, the $44M gap between $350M of net losses and $306M of operating outflows appears predominantly non-cash in nature, which implies reported losses overstate the cash actually consumed.

No quarter in the series posted a positive FCF, so the business has no internal cash funding capability and remains reliant on external capital, a constraint that grows more material as cumulative burn compounds. The trajectory of the burn itself is improving at the margin — from $56.6M in 2025Q1 to $11.8M in 2026Q2 — but the improvement tracks the contraction in operating expense rather than any observed revenue acceleration. Investors should treat the narrowing as conditional on cost discipline holding, since reversing the R&D cut would likely restore a burn rate closer to the $25-30M quarterly range seen through 2025.

The quarter-to-quarter reversals are two to three times the size of typical stock-based compensation add-backs, which appears to be the primary reason the OCF-to-net-income ratio looks so unstable rather than any change in loss economics. A persistent cumulative drag of $16M alongside a business reporting only $19.2M in quarterly revenue implies working capital is consuming a meaningful share of gross profit as it scales. Because these movements are directional and volatile rather than trended, they warrant further investigation into receivable collections and supplier payment terms before the burn trajectory can be reliably extrapolated.

Because cumulative stock-based compensation of $25.8M and depreciation of roughly $6.7M mathematically account for most of the divergence, the gap appears to be an accounting artifact of a non-cash-heavy cost structure rather than evidence that cash conversion is running ahead of earnings. The more consequential reading is that neither line is converging: both reported losses and operating outflows persist in every period, so there is no observed trend toward breakeven on either measure. For a company whose income statement analysis already flagged expense cuts as the driver of narrowing losses, the cumulative cash record suggests that same narrowing has not yet produced a self-funding profile.