Amkor Technology, Inc. (AMKR) Cash Flow Statement

The 2.6x cumulative conversion ratio is characteristic of a heavy-asset manufacturer where depreciation shields reported earnings from cash reality. However, the ratio's extreme volatility — swinging from 1.14x in 2025Q1 to 5.09x in 2024Q4 — reflects working capital distortion more than true earnings-quality variation, suggesting investors should normalize OCF on a trailing-twelve-month basis before drawing quality-of-earnings conclusions. The persistent and large gap between depreciation and net income signals that Amkor's accounting earnings understate its cash-generating capacity, which may be a structural feature of the business model rather than an anomaly.

The dramatic FCF swing from deeply negative to strongly positive over just two quarters appears driven primarily by working capital normalization rather than pure operational improvement, given that capex remained substantial through the interim. However, the fact that 2026Q3 generated $486.8M in OCF on only $190.6M in net income — a 2.55x conversion — alongside zero reported capex represents genuine cash-generation quality that is difficult to dismiss as timing alone. The sustainability of 24%+ FCF margins depends on whether capex truly reverted to zero or simply shifted between reporting periods, and investors should watch for a return to the elevated $200M+ quarterly capex run-rate in coming quarters.

The 2025Q4 capex spike of $432.1M — more than 2.5x the $166M D&A charge for the period — appears consistent with the Bac Ninh, Vietnam facility expansion and advanced packaging build-out rather than routine equipment refresh. Cumulative capex across the period substantially exceeds cumulative depreciation, confirming a net investment posture that should expand future capacity for AI/HPC and automotive packaging demand. The $0 capex in 2026Q3 may reflect a completed project milestone rather than a capital discipline pivot, and analysts should monitor whether the investment cycle reaccelerates to assess whether Amkor is front-loading capacity ahead of a demand inflection.

A clear seasonal pattern emerges: Q4 quarters consistently generate large positive working capital swings from receivables collection and inventory release, while Q1 quarters show significant reversals from restocking and receivables build. This cyclicality means any single quarter's OCF is essentially uninterpretable without seasonal adjustment — the 2025Q4 OCF of $644.5M, a 3.75x OCF/NI ratio, was heavily inflated by the $343.7M WC release, which then reversed sharply in Q1 2026. The magnitude of these swings relative to Amkor's quarterly net income suggests the company operates with a working capital cycle that is highly sensitive to end-market seasonality and product mix shifts, and investors should evaluate cash generation on a trailing-twelve-month basis to filter this distortion.