ADMA Biologics, Inc. (ADMA) Cash Flow Statement

The wide quarterly swings in OCF/NI, from 1.42 to -0.73, indicate that net income is not consistently backed by cash generation, largely due to working capital volatility. The negative working capital changes in several quarters, such as -$56.8M in 2025Q1, suggest that inventory build-up and receivables timing are significant. Investors should monitor whether the recent improvement to 0.78 in 2026Q2 is sustainable or just a timing artifact.

The trajectory shows a clear inflection: FCF was negative in 2025Q1 and 2025Q3, but turned strongly positive in 2026Q1 and remained positive in 2026Q2. This suggests that the company has moved past a period of heavy working capital investment and is now converting earnings into cash. The FCF margin of 48.7% in 2026Q1 is exceptionally high, but the subsequent drop to 21.9% in 2026Q2 indicates volatility that warrants monitoring.

ADMA's capital expenditures are modest, suggesting that the company is not in a heavy investment phase. The spike in 2025Q3 to $14.4M may reflect a one-time expansion or maintenance, but the overall trend is low. This implies that the business can generate high incremental free cash flow as revenue grows, but it also raises questions about whether the manufacturing capacity is sufficient to support future growth without additional investment.

The working capital line item shows extreme volatility, with large negative changes in many quarters, indicating that inventory build-up and receivables are consuming cash. This is consistent with the long manufacturing cycle for plasma products, where cash outflows occur well before revenue recognition. The positive changes in 2026Q1 and 2024Q4 suggest that the company is able to collect on receivables and reduce inventory at times, but the pattern is unpredictable. Investors should monitor inventory levels and days sales outstanding for signs of structural improvement.

The company has been actively repurchasing shares, with a notable $130.2M buyback in 2026Q1, which is a significant use of cash relative to its operating cash flow of $58.2M in that quarter. This suggests management is confident in the company's cash generation, but it also reduces the cash buffer. The acquisition activity is small but indicates a willingness to deploy capital for growth. Given the low debt levels, these actions appear manageable, but the sustainability of such buybacks depends on continued strong operating cash flow.

The cumulative gap between net income and operating cash flow is substantial, indicating that earnings have not been fully converted to cash. This is largely due to working capital build-up, particularly inventory, which is typical for plasma manufacturers. The gap suggests that reported profitability may overstate cash generation, and investors should be cautious about relying on net income alone. However, the recent quarters show improvement, with operating cash flow exceeding net income in 2026Q1, which may signal a reversal of the trend.