Free cash flow margins show significant instability, dropping to 11.1% in 2025Q3, even as the company continues to prioritize aggressive capital allocation, including a $1.8 billion share repurchase in the same period.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 |
|---|
| Cash from Operations | 4.85B | 5.31B | 5.27B | 4.14B | 4.14B | 3.69B | 2.8B | 2.99B | 2.71B | 2.18B | 2.09B | 2.46B | 2.12B | 1.95B | 1.33B | 512M | 502.1M | 471.5M | 1.08B | 1.31B | 1.05B | 1.05B | 786M | 325.9M | 784.2M | 758.5M | 676.6M | 672.9M | 679.9M | 748M |
| Operating CF Margin % | - | 35.21% | 36.22% | 32.95% | 46.99% | 46.13% | 36.34% | 38.37% | 37.07% | 33.29% | 33.52% | 36.64% | 32.07% | 31.8% | 23.32% | 9.89% | 10.08% | 10.71% | 22.41% | 27.93% | 22.93% | 23.93% | 20.14% | 8.9% | 21.39% | 20.51% | 18.51% | 19.25% | 19.33% | 20.12% |
| Operating CF Growth % | -43.68% | 0.76% | 27.36% | -0.12% | 12.31% | 31.62% | -6.29% | 10.25% | 24.29% | 4.45% | -15.05% | 15.83% | 8.87% | 46.84% | 159.38% | 1.97% | 6.49% | -56.31% | -17.91% | 25.08% | 0.03% | 33.68% | 141.18% | -58.44% | 3.39% | 12.1% | 0.55% | -1.03% | -9.1% | - |
| Net Income | 4.08B | 4.14B | 3.71B | 3.93B | 3.52B | 2.85B | 2.44B | 2.44B | 1.95B | 2.4B | 1.6B | 1.35B | 1.48B | 875M | 484M | 570M | 650.7M | 555.4M | 619M | 946.2M | 796.3M | 587.1M | 394M | 627.2M | 496M | 410.4M | 532.3M | 66.9M | 362.4M | 0 |
| Depreciation & Amortization | 2.03B | 2.02B | 1.9B | 1.54B | 853M | 811M | 779M | 706M | 696M | 661M | 640M | 595M | 552M | 565M | 539M | 490M | 489.6M | 497.2M | 491.3M | 472M | 464.1M | 464.6M | 431.8M | 401.8M | 367.7M | 377.4M | 333M | 315.8M | 304.9M | 249.9M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 113M | 0 | 0 | 0 | 0 | 0 | 51M | 66M | 110M | 92M | 64M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 160M | 171M | 28M | -7.88B | 136M | 242M | 221M | 181M | 256M | -210M | 320M | 234M | 354M | 212M | 140M | 187M | 211.2M | 134.2M | 160.6M | 38.7M | 75.3M | 258M | 131.5M | 32M | 99M | 134.8M | 111.6M | 16M | 155.7M | 203.8M |
| Other Non-Cash Items | -1.17B | -822M | -396M | 6.86B | -385M | -151M | -253M | -311M | -256M | -536M | -466M | -63M | -245M | 208M | 106M | -759M | -833.1M | -818M | -59.6M | -192.6M | -183.1M | -235.7M | -204.5M | -681.5M | -168.64M | -168.3M | -299.3M | 316.1M | -195M | 294.3M |
| Working Capital Changes | -234.89M | -196M | 24M | -308M | -92M | -66M | -389M | -26M | 65M | -138M | -55M | 275M | -124M | -2M | -5M | 24M | -16.3M | 102.7M | -132.2M | 50.3M | -101.6M | -23.3M | 33.2M | -53.6M | 10.84M | 4.2M | -1M | -41.9M | 51.9M | 0 |
| Change in Receivables | 0 | 0 | -133M | -317M | -147M | 32M | -61M | 27M | -107M | -91M | 44M | 80M | -112M | -29M | -40M | -69M | -8.8M | 206.4M | -69.1M | 70.16M | -100.89M | -62.08M | -38.94M | 47.45M | 21.18M | 31.29M | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | -36M | 1M | -27M | -14M | -15M | -8M | -11M | 9M | 14M | 15M | 7M | -19M | 7M | -15M | 22.5M | 75.5M | -23.4M | -28.52M | -15.78M | -14.67M | -35.45M | 2.51M | -6.63M | 28.78M | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | 0 | 202M | 57M | 95M | -108M | -308M | -21M | 153M | -30M | -95M | 0 | 0 | 0 | 0 | 0 | 0 | -197.7M | 0 | -45.22M | -399.15K | 39.28M | 112.14M | -77.44M | -20.48M | 5.31M | 0 | 0 | 0 | 0 |
| Cash from Investing | -2.43B | -2.67B | -2.8B | -2.16B | -1.5B | -13.73B | -2.03B | -1.8B | -1.46B | -1.29B | -1.07B | -1.12B | -750M | -1.6B | -1.01B | -1.04B | -635.6M | -379.3M | -856.1M | -2.51B | -693.7M | -869.2M | -666.1M | -720.5M | -571.7M | -589.6M | -536.9M | -1.08B | -992.3M | -240.9M |
| Capital Expenditures | -2.42B | -3.14B | -2.86B | -2.5B | -1.56B | -1.53B | -1.67B | -1.65B | -1.55B | -1.34B | -1.18B | -1.52B | -1.45B | -1.24B | -1.15B | -1.1B | -726.1M | -724.1M | -892.3M | -893.2M | -793.7M | -884.4M | -673.8M | -686.6M | -575.7M | -593.4M | -586.1M | -266.8M | -71.7M | -862.9M |
| CapEx % of Revenue | 16.13% | 20.82% | 19.68% | 19.9% | 17.67% | 19.16% | 21.67% | 21.14% | 21.2% | 20.45% | 18.97% | 22.68% | 21.89% | 20.15% | 20.16% | 21.33% | 14.58% | 16.45% | 18.53% | 18.97% | 17.32% | 20.14% | 17.26% | 18.76% | 15.71% | 16.04% | 16.04% | 7.63% | 2.04% | 23.22% |
| Acquisitions | 0 | 0 | 0 | 298M | 58M | -12.3B | -379M | -174M | 78M | 42M | 116M | 281M | 236M | 0 | 0 | 0 | 0 | 0 | 0 | -1.48B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -567.11M | -76M | 67M | 32M | 3M | 101M | 20M | 18M | 15M | 3M | -3M | 118M | 463M | -361M | 137M | 60M | 90.5M | 332.3M | 9.7M | 4.69M | 100M | 17.2M | 10.2M | -12M | 8M | 7.6M | 60.5M | -782.5M | -885.5M | 647.9M |
| Cash from Financing | -2.72B | -3.15B | -2.25B | -1.96B | -2.3B | 9.94B | -764M | -1.11B | -1.54B | -700M | -1.49B | -957M | -1.63B | -220M | -30M | 217M | -167.8M | 489.4M | -511.5M | 1.45B | -354.8M | -412.7M | 98.4M | 244.4M | -484.5M | 267.7M | -59.4M | 393.2M | -100.1M | 432.9M |
| Debt Issued (Net) | 2.05B | 1.53B | -1.61B | -1.3B | -1.62B | 10.49B | 874M | -103M | -115M | -32M | -46M | 2.01B | 588M | -56M | -6M | 384M | -248.6M | 104.7M | -351.6M | 1.79B | -22.6M | -274.4M | 177.34M | 324.23M | -405.7M | 1.18B | 598.9M | 214.9M | -25.4M | -9.3M |
| Equity Issued (Net) | -4B | -3.87B | 69M | 69M | 32M | 25M | -1.46B | -1.13B | -1.08B | -336M | -1.19B | -2.74B | -1.99B | 83M | 198M | 29M | 32M | 513.5M | 19.7M | -200.7M | -219.8M | -48.8M | 2.5M | 2.01M | 2M | 1.6M | 0 | 0 | 0 | 0 |
| Dividends Paid | -823M | -796M | -709M | -707M | -707M | -507M | -467M | -412M | -348M | -310M | -255M | -226M | -244M | -244M | -223M | -193M | -174.5M | -162.9M | -148.7M | -133.1M | -112.4M | -89.5M | -81.7M | -80.8M | -80.8M | -150M | -180.5M | -150M | 0 | -722.3M |
| Share Repurchases | -4.08B | -3.94B | 0 | 0 | 0 | 0 | -1.51B | -1.13B | -1.1B | -381M | -1.21B | -2.79B | -2.05B | 0 | 0 | 0 | 0 | 0 | -30.9M | -231.1M | -286.4M | -80.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 51.46M | -8M | 2M | -17M | 0 | -75M | 286M | 538M | 0 | -22M | -3M | 0 | 14M | -3M | 1M | -3M | 223.3M | 34.1M | -30.9M | 0 | 0 | 0 | 262.48K | -256.38K | 0 | -761.59M | -477.8M | 328.3M | -74.7M | 1.16B |
| Net Change in Cash | -286M | -555M | 275M | 13M | 369M | -65M | 14M | 72M | -277M | 174M | -486M | 424M | -250M | 143M | 286M | -314M | -318.5M | 561.6M | -260.5M | 253.8M | 2.5M | -231.2M | 218.3M | -150.2M | -272M | 436.6M | 80.3M | -9.5M | -412.5M | 217.7M |
| Free Cash Flow | 2.71B | 2.17B | 2.41B | 1.64B | 2.58B | 2.16B | 1.13B | 1.34B | 1.16B | 842M | 907M | 937M | 674M | 714M | 180M | -592M | -224M | -252.6M | 186.8M | 421.4M | 257.3M | 166.3M | 112.2M | -360.7M | 208.5M | 165.1M | 90.5M | 406.1M | 608.2M | -114.9M |
| FCF Margin % | 18.1% | 14.39% | 16.54% | 13.05% | 29.33% | 26.97% | 14.67% | 17.24% | 15.87% | 12.85% | 14.55% | 13.96% | 10.18% | 11.64% | 3.16% | -11.44% | -4.5% | -5.74% | 3.88% | 8.95% | 5.61% | 3.79% | 2.87% | -9.85% | 5.69% | 4.46% | 2.48% | 11.61% | 17.3% | -3.09% |
| FCF Growth % | 15.16% | -9.85% | 46.89% | -36.63% | 19.9% | 90.63% | -15.79% | 15.68% | 37.89% | -7.17% | -3.2% | 39.02% | -5.6% | 296.67% | 130.41% | -164.29% | 11.32% | -235.22% | -55.67% | 63.78% | 54.72% | 48.22% | 131.11% | -273% | 26.29% | 82.43% | -77.71% | -33.23% | 629.33% | - |
| FCF per Share | 3.02 | 2.37 | 2.57 | 1.75 | 2.77 | 3.16 | 1.66 | 1.93 | 1.62 | 1.15 | 1.21 | 1.16 | 0.77 | 0.81 | 0.21 | -0.69 | -0.26 | -0.30 | 0.24 | 0.54 | 0.32 | 0.21 | 0.14 | -0.45 | 0.26 | 0.21 | 0.11 | 0.51 | 0.77 | -0.14 |
| FCF Conversion (FCF/Net Income) | 0.67x | 1.28x | 1.42x | 1.05x | 1.18x | 1.29x | 1.15x | 1.23x | 1.39x | 0.91x | 1.31x | 1.82x | 1.44x | 2.23x | 2.74x | 0.90x | 0.77x | 0.85x | 1.74x | 1.39x | 1.32x | 1.94x | 1.90x | 0.82x | 1.58x | 1.85x | 1.27x | 10.06x | 1.88x | 1.60x |
| Interest Paid | 683M | 863M | 814M | 825M | 641M | 426M | 443M | 444M | 463M | 475M | 488M | 336M | 309M | 295M | 0 | 271M | 347M | 289.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 918M | 1.16B | 958M | 906M | 408M | 552M | 582M | 506M | 318M | 425M | 322M | 176M | 226M | 31M | 0 | 4M | 8M | 38.9M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Cross-border integration execution risk
According to reported financial statements, CPKC consistently generates operating cash flow in excess of net income, with the OCF/NI ratio frequently exceeding 1.30, suggesting that non-cash charges and depreciation remain significant drivers of the company's reported cash flow profile relative to its accounting earnings.
The persistent gap between net income and operating cash flow indicates that the company's earnings are heavily influenced by non-cash items, which is typical for capital-intensive rail operations. Investors should monitor whether this conversion quality remains stable as the company moves past the initial integration phase of the Kansas City Southern merger.
As indicated by recent quarterly data, free cash flow margins have exhibited notable volatility, dropping from a peak of 26.4% in 2026Q1 to as low as 11.1% in 2025Q3, reflecting the substantial capital requirements necessary to maintain the newly integrated tri-national rail network.
The inconsistency in free cash flow generation suggests that the company is currently prioritizing network investment over immediate cash return. This trajectory warrants further investigation to determine if the current capital expenditure levels are temporary integration costs or a permanent shift in the company's capital intensity.
Based on the provided figures, CPKC's capital expenditure as a percentage of revenue has remained elevated, frequently exceeding 20% in recent quarters, which underscores the ongoing necessity of heavy reinvestment to support the operational demands of the expanded North American rail footprint.
The high capital intensity reflects the reality of maintaining a massive, cross-border physical asset base that requires constant upkeep to ensure service reliability. Analysts should assess whether these expenditures are effectively driving the expected synergy realization or if they represent a structural increase in the cost of doing business.
As reported in recent filings, CPKC has utilized significant cash for share repurchases, including a notable $1.8 billion outflow in 2025Q3, which appears to contrast with the company's ongoing need for substantial capital reinvestment to integrate its recently acquired Mexican and U.S. rail assets.
The decision to return capital to shareholders while simultaneously managing a major integration suggests management's confidence in the long-term cash-generating potential of the combined network. However, investors should monitor if these buybacks limit the company's financial flexibility should operational or regulatory headwinds intensify in the near term.
Quick answers to the most common questions about buying CP stock.
Canadian Pacific Kansas City Ltd. (CP) generated $5.31B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Canadian Pacific Kansas City Ltd. (CP) generated $2.17B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Canadian Pacific Kansas City Ltd. (CP) spent $3.14B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Canadian Pacific Kansas City Ltd. (CP) returned $796.0M to shareholders via cash dividends and spent $3.94B on share repurchases. This shows the company's commitment to returning capital to its equity investors.