CNX Resources Corporation (CNX) Cash Flow Statement

The wide quarterly swings in OCF/NI, from -10.50 in 2024Q2 to 27.01 in 2024Q1, indicate that net income is heavily influenced by non-cash mark-to-market hedge adjustments. In 2026Q1, net income of $348.1M exceeded operating cash flow of $277.5M, implying that a portion of reported earnings may not be backed by cash generation. Investors should monitor the sustainability of these adjustments, as they can reverse and compress future cash conversion.

The trajectory shows that while FCF has been consistently positive, the growth rate has decelerated, aligning with the revenue growth slowdown. The 2026Q2 FCF margin of 22.2% is below the 35.0% seen in 2025Q3, suggesting that capital expenditures are absorbing a larger share of operating cash flow. This may indicate that maintenance capital requirements are rising as the company sustains production, warranting close attention to future FCF generation.

The elevated capital intensity, particularly in 2024 quarters where CapEx/Rev exceeded 44%, suggests that CNX is investing heavily to maintain its production base. The recent uptick to 23.0% in 2026Q2, after a dip to 16.7% in 2025Q3, may reflect increased drilling activity or infrastructure maintenance. Given the company's high fixed-cost structure, investors should assess whether these investments are yielding adequate returns or merely sustaining existing output.

The erratic working capital movements, including a -$17.5M change in 2025Q4 and -$13.0M in 2025Q3, suggest that CNX's cash conversion cycle is sensitive to commodity price timing and hedge settlements. The cumulative negative working capital impact implies that operational cash flow has been partially absorbed by changes in receivables, payables, or inventory. This volatility may complicate short-term liquidity planning, especially given the company's minimal cash balance.

The aggressive buyback program, including $200.4M in 2026Q2 alone, reflects management's focus on returning capital to shareholders and reducing share count. However, this strategy has left the company with a cash balance of just $779,000, as noted in the balance sheet, which may limit financial flexibility. The large acquisition outflow in 2025Q1 (-$517.6M) suggests a significant deal that could impact future cash flows, though details are not disclosed.

The divergence between cumulative net income and cumulative FCF indicates that a significant portion of reported earnings is not being converted into free cash flow, likely due to heavy capital expenditures. While operating cash flow has been robust, the capital intensity of the business means that shareholders are not seeing the full benefit in distributable cash. This pattern is typical for E&P companies, but the magnitude of the gap warrants monitoring, especially if commodity prices soften.