Free cash flow remains consistently negative, with quarterly outflows reaching $16.4 million in 2026Q1, further exacerbated by stock-based compensation expenses that have reached as high as $4.0 million per quarter.
| Cash from Operations | -54M | -54.36M | -43.1M | -58.56M | -51.32M | -29.38M | -8.67M | -139K |
| Operating CF Margin % | - | - | - | - | - | - | - | -16666.67% |
| Operating CF Growth % | -64.41% | -26.11% | 26.39% | -14.11% | -74.68% | -238.87% | -6136.69% | - |
| Net Income | -69.71M | -69.79M | -49.59M | -66.86M | -63.31M | -35.53M | -8.28M | -2.05M |
| Depreciation & Amortization | 1.02M | -2.63M | 596K | 537K | 406K | 129K | 5K | 0 |
| Stock-Based Compensation | 14.93M | 14.55M | 13.07M | 13.09M | 10.93M | 4.69M | 450K | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -5.06M | 406K | -6.19M | -6.05M | -1.33M | -58K | -33K | 95K |
| Working Capital Changes | 4.82M | 3.11M | -993K | 728K | 1.99M | 1.4M | -811K | 1.81M |
| Change in Receivables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 2.28M | 4.49M | -1.22M | -1.25M | 5.38M | 2.41M | -413K | 0 |
| Cash from Investing | 7.45M | 22.91M | 43.95M | 52.54M | -220.99M | -53.64M | -33.56M | 0 |
| Capital Expenditures | -121K | -193K | -340K | -256K | -918K | -1.54M | -76K | 0 |
| CapEx % of Revenue | - | - | - | - | - | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 39K | 52.11K | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 0 | -52.11K | 0 | 0 |
| Cash from Financing | 45.65M | 25.74M | 513K | 724K | 235K | 379.21M | 44.53M | 196K |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | -200K | 196K |
| Equity Issued (Net) | 25.71M | 25.74M | 513K | 724K | 662K | 378.98M | 44.73M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 19.93M | 0 | 0 | 0 | -427K | 228K | 1K | 0 |
| Net Change in Cash | -897K | -5.71M | 1.36M | -5.3M | -272.07M | 296.19M | 2.3M | 57K |
| Free Cash Flow | -54.12M | -54.55M | -43.45M | -58.82M | -52.23M | -30.91M | -8.74M | -139K |
| FCF Margin % | - | - | - | - | - | - | - | -16666.67% |
| FCF Growth % | -13.53% | -25.56% | 26.13% | -12.6% | -68.96% | -253.52% | -6191.37% | - |
| FCF per Share | -0.88 | -0.95 | -0.77 | -1.05 | -0.94 | -0.67 | -0.32 | -0.01 |
| FCF Conversion (FCF/Net Income) | 0.78x | 0.78x | 0.87x | 0.88x | 0.81x | 0.83x | 1.05x | 0.07x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 24K | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Critical liquidity and runway
According to the provided financial data, the OCF/NI ratio has fluctuated between 0.66 and 1.12, indicating that while non-cash expenses like stock-based compensation provide a buffer, the company's operating cash flow remains consistently negative and tightly tethered to the underlying net loss trajectory.
The divergence between net income and operating cash flow is largely driven by significant non-cash stock-based compensation, which masks the true cash-based operational deficit. Investors should note that the lack of revenue means this conversion metric primarily reflects the efficiency of cash burn rather than the quality of earnings.
As reported in quarterly filings, Design Therapeutics has maintained a consistent free cash flow burn, with quarterly outflows ranging from $9.5 million to $16.9 million, underscoring the company's total dependence on external financing to fund its ongoing clinical development programs.
The FCF trajectory shows no signs of stabilization, as the company continues to prioritize R&D investment over cash preservation. This persistent negative trend suggests that the company remains in a high-risk phase where capital depletion is the primary constraint on operational longevity.
Based on the cash flow statements, working capital changes have been erratic, swinging from a $2.9 million inflow in 2025Q3 to a $2.9 million outflow in 2024Q1, which suggests that timing differences in vendor payments and clinical trial accruals are significantly impacting short-term liquidity.
The volatility in working capital appears to be a byproduct of the company's reliance on third-party clinical research organizations and the lumpy nature of trial-related expenditures. This inconsistency warrants close monitoring, as any sudden shift in payment terms could exacerbate the already precarious cash position.
Analysis of the cash flow statement reveals that stock-based compensation consistently accounts for $2.7 million to $4.0 million per quarter, effectively acting as a non-cash subsidy that obscures the true magnitude of the company's operational cash burn required to retain specialized scientific personnel.
While stock-based compensation is a standard industry practice, its scale relative to the company's total cash burn is substantial and warrants investigation. This practice may be masking the true cost of operations, potentially leading to an underestimation of the capital required to reach the next clinical milestone.
Quick answers to the most common questions about buying DSGN stock.
Design Therapeutics, Inc. (DSGN) generated $-54.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Design Therapeutics, Inc. (DSGN) reported negative free cash flow of $54.6M in 2025, indicating capital requirements exceeded cash from operations.
Design Therapeutics, Inc. (DSGN) spent $0.2M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.