Cash generation remains volatile and insufficient, highlighted by a negative 15.3% free cash flow margin in 2025Q4 and a $1.2 billion outflow from working capital during the same period.
| Cash from Operations | 1.69B | 1.03B | 2.91B | 5.2B | 7.47B | 7.01B | 6.23B | 5.93B | 3.89B | -4.93B |
| Operating CF Margin % | - | 2.58% | 6.78% | 11.64% | 13.14% | 12.75% | 16.15% | 13.81% | 6.46% | -11.27% |
| Operating CF Growth % | -188.56% | -64.58% | -43.92% | -30.49% | 6.65% | 12.58% | 4.99% | 52.29% | 179% | - |
| Net Income | -2.76B | -2.62B | 1.2B | 660M | 4.64B | 6.41B | 1.29B | -1.27B | 4.63B | 595M |
| Depreciation & Amortization | 4.25B | 2.83B | 2.89B | 2.61B | 2.76B | 2.84B | 2.87B | 2.94B | 3.33B | 2.55B |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -343M | -341M | 135M | -1.22B | 79M | 278M | 258M | -228M | -530M | 1.41B |
| Other Non-Cash Items | 2.61B | 2.36B | 305M | 2.08B | 784M | -1.07B | 608M | 4.11B | -1.34B | 2.02B |
| Working Capital Changes | -1.64B | -1.2B | -1.62B | 1.07B | -786M | -1.45B | 1.19B | 387M | -3.25B | -11.5B |
| Change in Receivables | 20M | 73M | -224M | 1.16B | 1.19B | -2.13B | 171M | 1.25B | -1.53B | -11.43B |
| Change in Inventory | 103M | -52M | -529M | 844M | 347M | -1.77B | 515M | 668M | -983M | -891M |
| Change in Payables | -1.53B | -999M | 278M | -734M | -1.25B | 2.46B | -84M | -948M | 359M | 1.08B |
| Cash from Investing | -2.67B | 817M | -2.37B | -2.93B | -2.97B | -2.91B | -841M | -2.19B | -2.19B | 7.52B |
| Capital Expenditures | -3.71B | -2.48B | -125M | -121M | -235M | -823M | -135M | -9M | -46M | -187M |
| CapEx % of Revenue | 9.42% | 6.2% | 0.29% | 0.27% | 0.41% | 1.5% | 0.35% | 0.02% | 0.08% | 0.43% |
| Acquisitions | 629M | 3.23B | -28M | 58M | -137M | 0 | -333M | -638M | -18M | -749M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 343M | -8M | -2.74B | -2.32B | -1.79B | -1.39B | -287M | -1.82B | -1.7B | 8.05B |
| Cash from Financing | 5.46B | -435M | -1.17B | -3.12B | -3.36B | -6.07B | -2.76B | -4.09B | -5.4B | -3.33B |
| Debt Issued (Net) | 2.69B | 1.18B | 1.26B | -591M | 900M | -2.7B | -412M | -2.97B | -1.23B | -349M |
| Equity Issued (Net) | 85M | 85M | -328M | -437M | -2.11B | -680M | -17M | -407M | 112M | 489M |
| Dividends Paid | -2.23B | -1.49B | -1.97B | -1.97B | -2.01B | -2.07B | -2.07B | -2.08B | -3.71B | -3.23B |
| Share Repurchases | 0 | 0 | -494M | -625M | -2.33B | -1B | -125M | -500M | 0 | 0 |
| Other Financing | 4.92B | -206M | -139M | -115M | -142M | -622M | -264M | 1.36B | -572M | -230M |
| Net Change in Cash | 4.89B | 1.69B | -785M | -892M | 907M | -2.08B | 2.73B | -384M | 2.76B | 0 |
| Free Cash Flow | -2.02B | -1.45B | -151M | 2.72B | 5.42B | 4.68B | 4.84B | 3.96B | 2.12B | -7.92B |
| FCF Margin % | -5.13% | -3.62% | -0.35% | 6.09% | 9.52% | 8.52% | 12.56% | 9.22% | 3.51% | -18.12% |
| FCF Growth % | -307.27% | -858.28% | -105.55% | -49.81% | 15.62% | -3.18% | 22.2% | 87.06% | 126.72% | - |
| FCF per Share | -2.80 | -2.03 | -0.21 | 3.83 | 7.47 | 6.26 | 6.52 | 5.33 | 2.82 | -10.56 |
| FCF Conversion (FCF/Net Income) | 0.73x | -0.39x | 2.61x | 8.82x | 1.63x | 1.11x | 5.08x | -4.34x | 0.87x | -10.60x |
| Interest Paid | 0 | 0 | 887M | 800M | 675M | 801M | 842M | 993M | 1.14B | 1.11B |
| Taxes Paid | 0 | 0 | 827M | 735M | 793M | 731M | 518M | 881M | 1.19B | 1.26B |
Cyclical Cash Flow Volatility
As reported in recent financial statements, the relationship between net income and operating cash flow has become increasingly erratic, with the OCF/NI ratio reaching extreme levels such as -15.77 in 2023Q4, suggesting that accounting earnings are currently failing to reflect the underlying cash-generating reality of the business.
The persistent divergence between net income and operating cash flow indicates that non-cash charges and working capital swings are heavily distorting the company's reported profitability. Investors should monitor this disconnect, as it suggests that the firm's ability to convert accounting profits into actual liquidity is currently compromised by the cyclical nature of its operations.
Based on the provided quarterly data, Dow's free cash flow trajectory has turned sharply negative, culminating in a -15.3% FCF margin in 2025Q4, which highlights the significant pressure on internal cash generation during the current industry downturn and elevated capital expenditure requirements.
The inability to maintain positive free cash flow over the last ten quarters suggests that the company's current business model is struggling to self-fund its operations and dividend obligations. This trend warrants further investigation into whether the current capital intensity is sustainable without further reliance on external financing or balance sheet depletion.
According to the reported figures, Dow's capital expenditure reached a peak of 26.2% of revenue in 2025Q4, a level that appears disproportionately high given the company's current negative net margins and the broader cyclical headwinds facing the global chemical manufacturing sector.
The high level of capital spending relative to revenue suggests that the company is either committed to long-term capacity expansion or is forced into heavy maintenance spending to keep aging assets operational. This capital intensity appears to be a primary driver of the company's recent cash burn, potentially limiting management's flexibility in a low-growth environment.
As indicated by the quarterly cash flow data, working capital changes have been highly volatile, including a significant $1.2 billion outflow in 2025Q4, which suggests that the company is struggling to manage its inventory and payables efficiently amidst a period of contracting demand.
The erratic nature of working capital movements implies that the company may be experiencing difficulty in aligning its production cycles with actual customer demand. This volatility appears to be exacerbating the company's cash flow challenges, as the timing of cash inflows from receivables and outflows for inventory remains highly sensitive to industrial production cycles.
Quick answers to the most common questions about buying DOW stock.
Dow Inc. (DOW) generated $1.03B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Dow Inc. (DOW) reported negative free cash flow of $1.45B in 2025, indicating capital requirements exceeded cash from operations.
Dow Inc. (DOW) spent $2.48B 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, Dow Inc. (DOW) returned $1.49B to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.