Cash conversion efficiency appears volatile, as evidenced by the OCF/NI ratio reaching 4.61 in 2025Q4, while free cash flow margins have fluctuated between 3.6% and 17.5% over the observed period.
| Cash from Operations | 266.21M | 211.69M | 145.46M | 208.72M |
| Operating CF Margin % | - | 12.38% | 9.64% | 15.29% |
| Operating CF Growth % | 351.85% | 45.53% | -30.31% | - |
| Net Income | 134.54M | 101.75M | 98.32M | 88.23M |
| Depreciation & Amortization | 94.2M | 93.7M | 90.22M | 88.75M |
| Stock-Based Compensation | 1.68M | 0 | 0 | 0 |
| Deferred Taxes | 7.88M | -3.34M | -31.58M | -31.1M |
| Other Non-Cash Items | 48.43M | 69.67M | 14.23M | 25.85M |
| Working Capital Changes | -20.53M | -50.1M | -25.72M | 36.99M |
| Change in Receivables | -36.76M | -54.59M | -25.36M | -7.43M |
| Change in Inventory | -13.7M | -6.33M | 5.83M | 29.39M |
| Change in Payables | -9.56M | -13.5M | 5.58M | -10.88M |
| Cash from Investing | -86.01M | -91.65M | -87.76M | -52M |
| Capital Expenditures | -50.56M | -53.67M | -43.48M | -32.69M |
| CapEx % of Revenue | 2.94% | 3.14% | 2.88% | 2.39% |
| Acquisitions | -14.25M | -12.33M | -25.52M | -15.06M |
| Investments | - | - | - | - |
| Other Investing | -21.2M | -25.65M | -18.76M | -4.26M |
| Cash from Financing | -241.32M | -157.91M | -75.37M | -91.86M |
| Debt Issued (Net) | -738.02M | -647.15M | 827.1M | -72.73M |
| Equity Issued (Net) | 492.06M | 497.02M | -1.33M | -18.93M |
| Dividends Paid | 0 | 0 | -265.94M | 0 |
| Share Repurchases | -5.07M | -6.21M | -1.45M | -18.95M |
| Other Financing | 4.65M | -7.78M | -635.2M | -195K |
| Net Change in Cash | -62.39M | -38.34M | -21.93M | 209.97M |
| Free Cash Flow | 215.65M | 158.02M | 101.97M | 176.03M |
| FCF Margin % | 12.55% | 9.24% | 6.76% | 12.89% |
| FCF Growth % | 103.57% | 54.96% | -42.07% | - |
| FCF per Share | 1.06 | 0.80 | 0.55 | 1.44 |
| FCF Conversion (FCF/Net Income) | 1.60x | 2.08x | 1.48x | 2.37x |
| Interest Paid | 85.6M | 0 | 0 | 0 |
| Taxes Paid | 8.28M | 0 | 0 | 0 |
High Debt Leverage Sensitivity
Based on reported financial statements, ALH consistently generates operating cash flow significantly exceeding net income, with the OCF/NI ratio reaching 4.61 in 2025Q4, suggesting that non-cash charges and working capital adjustments play a disproportionately large role in the company's reported cash generation profile.
The persistent gap between net income and operating cash flow indicates that accounting earnings may be a conservative proxy for the firm's actual liquidity. Investors should monitor whether this divergence is driven by sustainable depreciation of the heavy-duty asset base or if it reflects aggressive accrual management that could normalize in future periods.
As indicated by recent quarterly data, ALH's free cash flow margins have fluctuated significantly, ranging from a low of 3.6% in 2024Q1 to a peak of 17.5% in 2026Q1, highlighting the sensitivity of cash conversion to both operational cycles and the company's heavy capital expenditure requirements.
The trajectory of free cash flow appears to be highly sensitive to the timing of large-scale institutional installations and the associated working capital swings. While the recent expansion to 17.5% suggests improved efficiency, the historical volatility warrants caution regarding the predictability of cash available for debt service.
According to the provided cash flow data, working capital changes have been a major source of volatility, swinging from a $49.2M inflow in 2024Q4 to a $45.5M outflow in 2025Q2, which suggests that inventory and receivables management are primary drivers of short-term liquidity fluctuations.
These dramatic shifts in working capital suggest that the company's cash position is highly susceptible to the timing of large commercial contracts and the credit terms extended to laundromat operators. The reliance on these swings to fund operations may indicate a lack of structural cash flow stability during periods of rapid inventory build-up.
Based on historical cash flow statements, ALH has utilized significant portions of its cash to fund substantial share repurchases and dividends, such as the $133M dividend payment in 2024Q4, despite maintaining a highly leveraged capital structure that may limit future strategic flexibility.
The decision to prioritize shareholder returns over rapid deleveraging in a high-interest-rate environment appears to be a strategic choice that may increase the company's vulnerability to credit market tightening. Analysts should investigate whether these distributions are sustainable given the ongoing need to fund growth and manage the existing debt burden.
Quick answers to the most common questions about buying ALH stock.
Alliance Laundry Holdings Inc. (ALH) generated $211.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Alliance Laundry Holdings Inc. (ALH) generated $158.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Alliance Laundry Holdings Inc. (ALH) spent $53.7M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Alliance Laundry Holdings Inc. (ALH) spent $6.2M on share repurchases. This shows the company's commitment to returning capital to its equity investors.