Free cash flow burn accelerated to -$231.5M in 2026Q2, with operating cash flow of -$228.2M exceeding net losses due to $46.0M in stock-based compensation, and no capital returns to shareholders.
Denali Therapeutics Inc. (DNLI) cash flow statement — 11-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 |
|---|
| Cash from Operations | -565.24M | -412.6M | -347.69M | -357.99M | -244.72M | -211.39M | 416.15M | -151.58M | 50.12M | -76.64M | -72.36M | -15.05M |
| Operating CF Margin % | - | - | - | -108.31% | -225.62% | -434.41% | 123.98% | -568.17% | 38.8% | - | - | - |
| Operating CF Growth % | -302.01% | -18.67% | 2.88% | -46.29% | -15.77% | -150.8% | 374.55% | -402.45% | 165.4% | -5.91% | -380.73% | - |
| Net Income | -511.45M | -512.54M | -422.77M | -145.22M | -325.99M | -290.58M | 71.14M | -197.61M | -36.24M | -88.19M | -86.65M | -16.79M |
| Depreciation & Amortization | 16.9M | 14.81M | 8.99M | 16.73M | 10.38M | 8.59M | 8.53M | 7.99M | 7.42M | 3.08M | 1.47M | 121K |
| Stock-Based Compensation | 93.04M | 99.63M | 102.88M | 108.1M | 99.85M | 85.25M | 50.35M | 38.38M | 18.79M | 4.41M | 2.95M | 479K |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 55K | 0 | 0 | 0 | 307K | 0 |
| Other Non-Cash Items | 16.56M | -14.65M | -53.73M | -47.67M | -4.92M | 5.76M | -2.32M | -3.25M | -2.74M | 754K | 5.28M | 710K |
| Working Capital Changes | -51.85M | 149K | 16.94M | -289.93M | -24.03M | -20.41M | 288.4M | 2.92M | 62.89M | 3.31M | 4.29M | 426K |
| Change in Receivables | -3.93M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -4.14M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 500K | -7.52M | 1.44M | 2.43M | 2.27M | 3.71M | -1.62M | 1.03M | -526K | 207K | 161K | 1.68M |
| Cash from Investing | 163.44M | 255.28M | -88.76M | 249.31M | -141.39M | -21.63M | -623.21M | 147.71M | -287.42M | -41.17M | -219M | -3.06M |
| Capital Expenditures | -5.88M | -9.5M | -15.91M | -12.94M | -17.83M | -8.5M | -3.1M | -17.92M | -3.39M | -2.88M | -6.13M | -3.06M |
| CapEx % of Revenue | 163.24% | - | - | 3.91% | 16.44% | 17.47% | 0.92% | 67.17% | 2.63% | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 123.55M | 0 | 620.11M | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | -123.55M | 0 | -620.11M | 0 | -284.03M | -38.29M | -212.87M | 0 |
| Cash from Financing | 644.43M | 189.22M | 484.3M | 17.82M | 310.67M | 19.35M | 634.75M | 6.19M | 97.02M | 296.32M | 300.48M | 48.85M |
| Debt Issued (Net) | -1.39M | -8.17M | -32.34M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5M |
| Equity Issued (Net) | 245.86M | 197.38M | 499.25M | 17.82M | 296.21M | 19.35M | 614.09M | 0 | 94.41M | 295.59M | 300.37M | 43.34M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 399.96M | 0 | 17.39M | 0 | 14.46M | 0 | 20.66M | 6.19M | 2.61M | 733K | 111K | 510K |
| Net Change in Cash | 242.62M | 31.9M | 47.85M | -90.94M | -75.43M | -213.67M | 427.69M | 2.33M | -140.29M | 178.52M | 9.11M | 30.74M |
| Free Cash Flow | -571.13M | -422.1M | -363.61M | -370.93M | -262.55M | -219.89M | 413.06M | -169.5M | 46.72M | -79.51M | -78.49M | -18.11M |
| FCF Margin % | -15847.03% | - | - | -112.22% | -242.06% | -451.88% | 123.06% | -635.34% | 36.17% | - | - | - |
| FCF Growth % | -55.22% | -16.09% | 1.97% | -41.28% | -19.4% | -153.23% | 343.7% | -462.77% | 158.76% | -1.3% | -333.33% | - |
| FCF per Share | -3.05 | -2.41 | -2.21 | -2.70 | -2.09 | -1.81 | 3.67 | -1.77 | 0.50 | -5.31 | -12.22 | -6.03 |
| FCF Conversion (FCF/Net Income) | 1.12x | 0.81x | 0.82x | 2.47x | 0.75x | 0.73x | 5.85x | 0.77x | -1.38x | 0.87x | 0.84x | 0.90x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 47K | 210K | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying DNLI stock.
Denali Therapeutics Inc. (DNLI) generated $-412.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Denali Therapeutics Inc. (DNLI) reported negative free cash flow of $422.1M in 2025, indicating capital requirements exceeded cash from operations.
Denali Therapeutics Inc. (DNLI) spent $9.5M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
Sustained R&D cash burn
Metrics are mathematically derived from official filings.
Cash Conversion Distorted by SBC
Denali's operating cash flow consistently exceeds net losses, with OCF/NI averaging 1.79 in 2026Q2, driven by large non-cash stock-based compensation, according to recent SEC filings.
The positive OCF/NI ratio is misleading because it reflects substantial non-cash SBC charges, not operational efficiency. In 2026Q2, SBC of $46.0M accounted for a significant portion of the gap between net loss and operating cash outflow. Investors should monitor the cash impact of equity compensation, as it dilutes shareholders without immediate cash outlay.
FCF Burn Accelerates Sharply
Free cash flow deteriorated from -$88.8M in 2024Q4 to -$231.5M in 2026Q2, a 161% increase in burn, as reported in quarterly cash flow statements.
The widening FCF deficit is driven by escalating operating losses, with quarterly cash burn now exceeding $200M. This trajectory suggests the company is consuming capital at an unsustainable rate, likely necessitating additional financing or strategic partnerships. The lack of revenue growth amplifies the urgency of pipeline milestones.
Minimal Capex, R&D Dominates
Capital expenditures remain negligible, averaging under $4M per quarter, representing less than 1% of revenue, per cash flow data, indicating a capital-light model focused on R&D.
The low capex intensity reflects a biotech model where intangible assets, not physical infrastructure, drive value. However, the company's heavy R&D spending, exceeding $100M quarterly, is the true capital requirement. This suggests that traditional capex metrics understate the cash needed to sustain operations.
Working Capital Swings Add Volatility
Working capital changes have swung from +$30.4M in 2024Q3 to -$27.5M in 2026Q1, per reported figures, adding unpredictability to quarterly cash flows.
The volatile working capital adjustments, likely tied to timing of payables and receivables, obscure the underlying cash burn. In 2026Q2, a -$23.1M working capital outflow exacerbated the operating cash deficit. Investors should normalize for these swings to assess the true operational cash consumption.
No Capital Returns, All Cash to R&D
Denali has paid no dividends and made no buybacks over the past ten quarters, with all cash directed toward R&D and operations, as per cash flow statements.
The absence of capital returns is typical for a pre-commercial biotech, but it underscores the company's singular focus on advancing its pipeline. With no acquisition activity reported, the cash burn is entirely organic. This deployment strategy heightens dependence on successful clinical outcomes to generate future returns.
Cumulative Losses Outpace Cash Burn
Over the last ten quarters, cumulative net losses of -$1.19B exceed cumulative operating cash outflows of -$1.12B, per reported data, indicating non-cash charges inflate reported losses.
The $70M gap between net income and operating cash flow is primarily attributable to stock-based compensation, which is non-cash. This divergence suggests that while the company is burning cash heavily, the economic reality is slightly less severe than accounting losses imply. However, the trend is concerning as cash burn is accelerating faster than net losses.
What Could Invalidate the Base Case
The cash flow statement may obscure the true cash burn if SBC is not fully cash-settled or if working capital swings reverse, per reported figures, potentially worsening the outlook.
While SBC is non-cash, it still represents a real economic cost through dilution, and if the company issues shares to fund operations, the cash flow statement may understate the long-term cash impact. Additionally, the volatile working capital changes could reverse, causing operating cash outflows to spike. Investors should monitor the company's financing activities and cash runway closely, as the current burn rate may require significant capital raises.