Aviat Networks, Inc. (AVNW) Cash Flow Statement

The positive spread implies depreciation, stock compensation and other non-cash charges are doing substantial work, since the -$7.7M of cumulative reported earnings did not translate into cash consumption. However, in 2026Q2 the disclosed components (net income $5.7M, D&A $1.6M, SBC $1.3M, working capital -$10.1M) sum to roughly -$1.5M against reported operating cash flow of $23.9M, suggesting material unitemized addbacks whose character is not apparent from the data provided. Investors may want to reconcile that gap before treating the headline conversion ratio as evidence of earnings quality.

The dispersion rather than the level is the signal: two quarters above $18M against four negative prints suggests cash generation is tied to episodic order deliveries rather than a dependable run-rate, echoing the revenue lumpiness flagged in the income statement work. Cumulative FCF of $5.1M is nonetheless directionally stronger than the -$7.7M of cumulative net income, meaning the business is not funding itself purely from balance sheet reserves. The 2026Q4 print of $2.5M on a 2.0% FCF margin appears to represent normalization at a low positive level rather than acceleration.

The persistent negative contribution suggests receivables and inventory are absorbing cash as revenue swings between $88M and $121M, consistent with order-timing lumpiness rather than deteriorating collection policy per se. Only 2025Q2 (+$8.8M) and 2024Q4 (+$1.7M) produced meaningful releases, so the pattern reads as structural draw rather than a two-quarter timing distortion. If this pace persists, working capital alone could absorb the majority of operating cash flow before any capital expenditure, which would cap structural FCF upside.

CapEx exceeded depreciation cumulatively by $6.8M, implying the asset base is being replaced at roughly the pace it wears out, which is unusual for a hardware manufacturer and may point to a heavier outsourced production mix. The swing from 6.1% of revenue in 2025Q1 to 0.5% in 2026Q4 shows capital deployment is lumpy rather than scaled to the top line. Because intensity sits well below the level at which maintenance would be obviously constrained, the data does not by itself confirm underinvestment, but the low absolute spend leaves little buffer if a capacity expansion is required.

Buybacks of $2.9M against $15.5M of stock-based compensation imply the repurchase program is not currently dilution-neutral, so per-share economics depend on operating improvement rather than capital return. The $18.1M acquisition landed in the same quarter that produced -$32.6M of free cash flow, meaning the deal and a $13.1M working capital draw compounded into a significant cash use. Buyback activity resumed in 2026Q3 and 2026Q4 ($0.5M and $2.2M) in quarters with operating cash flow of -$1.7M and $3.1M respectively, so its durability appears tied to a cash flow recovery investors should monitor.