Free cash flow remains highly inconsistent, fluctuating from a peak of $26.2M in 2025Q4 to a negative $31.0M in 2025Q1, while stock-based compensation of roughly $10M per quarter continues to obscure underlying cash burn.
| Cash from Operations | 26.99M | -5.63M | -112.16M | -247.06M | -257.71M | -174.63M | -113.03M | -42.84M | -14.09M | -3.77M |
| Operating CF Margin % | - | -1.5% | -57.07% | -414.48% | -6991.73% | - | - | - | - | - |
| Operating CF Growth % | 3903.7% | 94.98% | 54.6% | 4.14% | -47.58% | -54.49% | -163.87% | -204.12% | -273.11% | - |
| Net Income | -2.38M | -16.14M | -140.04M | -262.14M | -311.46M | -206.36M | -135.68M | -42M | -19.25M | -4.98M |
| Depreciation & Amortization | 2.1M | 4.67M | 2.6M | 1.52M | 934K | 454K | 122K | 68K | 0 | 0 |
| Stock-Based Compensation | 30.59M | 40.36M | 41.73M | 38.81M | 32.68M | 23.89M | 7.94M | 824K | 151K | 27K |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 3.45M | 114K | 0 | 0 | 0 |
| Other Non-Cash Items | 12.04M | 314K | -1.37M | -1.75M | 30.3M | 309K | 333K | -227K | 2.91M | 897K |
| Working Capital Changes | -15.35M | -34.83M | -15.08M | -23.5M | -10.18M | 3.62M | 14.13M | -1.5M | 2.11M | 279K |
| Change in Receivables | -58.96M | -73.16M | -47.26M | -17.35M | -8.46M | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -19.96M | -7.33M | -400K | -5.62M | -7.51M | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 3.61M | -1.69M | 2.23M | 3.15M | 1.56M | 245K | 5.67M | -458K | 1.26M | 537K |
| Cash from Investing | -53.34M | -30.25M | 28.82M | 180.23M | -87.2M | -75.95M | -181.82M | -26.32M | -11.53M | 0 |
| Capital Expenditures | -78K | -686K | -143K | -428K | -23.28M | -995K | -321K | -295K | 0 | 0 |
| CapEx % of Revenue | 0.02% | 0.18% | 0.07% | 0.72% | 631.66% | - | - | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 22.95M | 74.96M | 181.5M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -10M | -10M | -5M | 0 | -22.95M | -74.96M | -181.5M | 0 | -11.53M | 0 |
| Cash from Financing | 7.64M | 6.97M | 66.2M | 101.32M | 301.8M | 281.95M | 298.14M | 93.1M | 61.59M | 7.12M |
| Debt Issued (Net) | 0 | 0 | -100M | 0 | 125M | 73.99M | 0 | 0 | 0 | 50K |
| Equity Issued (Net) | 6.17M | 6.97M | 161.68M | 98.9M | 176.05M | 207.49M | 297M | 94.24M | 61.21M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 1.48M | 0 | 4.52M | 2.42M | 751K | 470K | 1.14M | -1.14M | 386K | 7.07M |
| Net Change in Cash | -18.65M | -28.74M | -17.37M | 34.45M | -43.12M | 31.37M | 3.29M | 23.94M | 35.98M | 3.34M |
| Free Cash Flow | 26.92M | -6.31M | -112.3M | -247.49M | -281M | -175.62M | -113.35M | -43.13M | -14.09M | -3.77M |
| FCF Margin % | 6.48% | -1.68% | -57.14% | -415.2% | -7623.39% | - | - | - | - | - |
| FCF Growth % | 123.07% | 94.38% | 54.62% | 11.93% | -60% | -54.93% | -162.81% | -206.22% | -273.11% | - |
| FCF per Share | 0.21 | -0.05 | -0.93 | -3.57 | -5.11 | -3.55 | -3.18 | -1.13 | -0.39 | -3.57 |
| FCF Conversion (FCF/Net Income) | -11.33x | 0.35x | 0.80x | 0.94x | 0.83x | 0.85x | 0.83x | 1.02x | 0.73x | 0.76x |
| Interest Paid | 2.62M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Liquidity and dilution risk
As reported in financial statements, the relationship between net income and operating cash flow for ARQT remains inconsistent, with OCF/NI ratios fluctuating wildly from -0.20 in 2026Q1 to 1.51 in 2025Q4, suggesting that reported earnings are currently poor proxies for actual cash generation capabilities.
The significant divergence between net income and operating cash flow indicates that non-cash items and working capital swings are heavily distorting the bottom line. Investors should monitor whether this volatility stabilizes as the commercial launch matures, as current figures suggest a lack of predictable cash conversion.
Based on Arcutis's reported figures, free cash flow has exhibited extreme instability, swinging from a peak of $26.2M in 2025Q4 to a negative $31.0M in 2025Q1, highlighting the company's ongoing struggle to achieve a consistent, self-funding operational state amidst its aggressive commercial expansion phase.
The erratic FCF margins suggest that the company's cash burn is highly sensitive to the timing of marketing investments and inventory management. This lack of a clear upward trend in FCF generation warrants further investigation into the sustainability of the current commercial model.
According to recent SEC filings, working capital changes have been a primary driver of cash flow volatility, evidenced by a massive $19.9M outflow in 2025Q3 followed by a $5.1M inflow in 2025Q2, indicating that inventory and receivables management remains a significant source of operational friction.
These sharp fluctuations in working capital suggest that the company is still refining its supply chain and channel inventory strategies. Such instability makes it difficult to forecast future cash requirements and implies that operational efficiency is not yet optimized.
Data from the cash flow statement reveals that stock-based compensation consistently averages around $10M per quarter, which effectively masks the true extent of the company's cash burn and complicates the assessment of underlying operational profitability for shareholders evaluating the firm's long-term viability.
By adding back significant non-cash SBC expenses, the company's operating cash flow figures appear more favorable than the underlying business performance might otherwise suggest. Investors should be cautious, as this reliance on equity-based incentives may continue to dilute shareholders while failing to bridge the gap to sustainable cash generation.
Quick answers to the most common questions about buying ARQT stock.
Arcutis Biotherapeutics, Inc. (ARQT) generated $-5.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Arcutis Biotherapeutics, Inc. (ARQT) reported negative free cash flow of $6.3M in 2025, indicating capital requirements exceeded cash from operations.
Arcutis Biotherapeutics, Inc. (ARQT) spent $0.7M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.