CareDx, Inc (CDNA) Cash Flow Statement

The erratic conversion ratio suggests reported net income is heavily influenced by non-operating or timing items rather than recurring operating activity. Operating cash flow was positive in most quarters while net income alternated sign, which may indicate that accruals and working capital movements are driving much of the reported profit volatility. Investors should monitor whether conversion stabilizes before treating any single quarter's earnings as representative.

Free cash flow has been positive in seven of the ten reported quarters, but the swing between quarters is large enough that run-rate estimates would be unreliable. The 2026Q3 margin of 8.0% sits well below the 2025Q3 peak, which may reflect the $15.9M working capital drain in that quarter rather than a deterioration in underlying collections. Further investigation of working capital timing is warranted before extrapolating recent margins.

The magnitude of working capital movements relative to operating cash flow suggests that receivables and payables timing, rather than core cash generation, dominates quarter-to-quarter results. The large 2024Q4 outflow alongside strong reported net income that quarter may indicate a build in receivables that was later partially reversed. Investors should monitor collection efficiency to determine whether these swings are timing-related or reflect a structural change in customer payment behavior.

The absence of dividends and sporadic repurchases suggests management has prioritized balance sheet flexibility over shareholder distributions. The $145.8M acquisition outflow in 2026Q3 is a material deployment that cannot be evaluated against return data supplied here, so its contribution to future cash generation remains unclear. This pattern warrants further investigation into whether the acquisition is accretive to free cash flow.