Aehr Test Systems (AEHR) Cash Flow Statement

The 2027Q1 result, where net income of $7.2M coincided with operating cash outflow of $3.1M, suggests that reported profit is not converting into cash in the period and that working capital absorbed roughly $12.7M. The OCF/NI ratio swinging between 0.05 and 5.71 indicates that quarterly net income is a poor proxy for cash generation at this company. Investors should monitor whether the 2027Q1 working capital build reverses in subsequent quarters or reflects a structural shift in receivables and inventory.

The FCF trajectory is dominated by volatility rather than a sustained trend, and the single strongly positive quarter in 2025Q1 coincided with a $10.6M acquisition outflow that is excluded from FCF but still consumed cash. The most recent quarter's negative FCF of -$3.1M, after a positive 2026Q4, appears to reflect working capital timing rather than a clear operating improvement. The data suggests cash generation depends heavily on the timing of order receipts and collections.

The magnitude of the 2027Q1 working capital outflow, roughly four times the 2025Q4 outflow, suggests a sharp build in receivables or inventory tied to the revenue rebound from $9.9M to $33.0M. Rapid revenue growth consuming cash is consistent with a company shipping large order volumes before collecting payment. Investors should watch collection cycles closely, as the reported figures do not isolate receivables from inventory.

The spike to 20.0% of revenue in 2025Q4 reflects a period of low revenue combined with $2.8M of capex, so the ratio overstates structural intensity. Depreciation and amortization of roughly $0.1M to $1.0M per quarter sits well below the largest capex outlays, which may indicate some capacity or development investment not yet reflected in depreciation. The data does not separate maintenance from growth capex, so the true reinvestment requirement cannot be determined from the supplied figures.

The cumulative gap is driven heavily by the $23.9M net income in 2024Q4, which the prior income statement analysis links to a large non-operating or tax-related item rather than core operations. Stripping that quarter out, the underlying net income base is closer to losses, which would be consistent with the negative operating cash flow pattern. This suggests earnings quality is weak and that headline profits should not be relied upon as an indicator of cash generation.