Cash conversion efficiency remains volatile, evidenced by a sharp decline in the operating cash flow to net income ratio to 0.59 in 2026Q1 alongside a $11.1 billion acquisition-driven cash outflow.
| 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 | Dec'96 |
|---|
| Cash from Operations | 4.74B | 4.47B | 4.33B | 3.62B | 2.53B | 2.16B | 2.94B | 3.45B | 2.66B | 2.67B | 2.57B | 2.41B | 1.88B | 2.29B | 1.66B | 1.25B | 1.28B | 1.41B | 1.42B | 1.16B | 1.43B | 1.14B | 838M | 874M | 900M | 765M | 415M | 682M | 642M | 763M | 693M |
| Operating CF Margin % | - | 16.29% | 17.39% | 15.62% | 12.21% | 11.02% | 16.49% | 16.13% | 12.3% | 13.07% | 13.01% | 11.55% | 8.33% | 10.36% | 10.2% | 7.78% | 9.35% | 11.86% | 9.21% | 8.91% | 11.57% | 10.3% | 8.54% | 10.84% | 12.48% | 10.48% | 4.99% | 8.12% | 9.69% | 10.09% | 9.96% |
| Operating CF Growth % | 136.32% | 3.35% | 19.4% | 43.07% | 17.11% | -26.53% | -14.69% | 29.83% | -0.3% | 3.74% | 6.68% | 28.27% | -17.81% | 37.32% | 33.33% | -2.65% | -8.95% | -0.56% | 21.96% | -18.87% | 26.08% | 35.44% | -4.12% | -2.89% | 17.65% | 84.34% | -39.15% | 6.23% | -15.86% | 10.1% | 7.11% |
| Net Income | 3.99B | 4.09B | 3.8B | 3.22B | 2.46B | 2.15B | 1.41B | 2.21B | 2.15B | 2.99B | 1.93B | 1.98B | 1.79B | 1.86B | 1.22B | 1.35B | 937M | 385M | 1.06B | 994M | 950M | 805M | 648M | 386M | 281M | 169M | 453M | 617M | 349M | 464M | 349M |
| Depreciation & Amortization | 1.05B | 1.01B | 921M | 926M | 954M | 922M | 811M | 884M | 903M | 914M | 929M | 925M | 983M | 997M | 598M | 556M | 551M | 573M | 592M | 469M | 434M | 409M | 400M | 394M | 376M | 449M | 462M | 441M | 331M | 342M | 320M |
| Stock-Based Compensation | -50M | -50M | 0 | 0 | 0 | 0 | 0 | 87M | 0 | 0 | -1M | -1M | -20M | -32M | -21M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 57M | 45M | -154M | -182M | -128M | -111M | -86M | -71M | -115M | -206M | -83M | -100M | -382M | -311M | -155M | -113M | 26M | -191M | -225M | -51M | 37M | -20M | -133M | -54M | -51M | 72M | 44M | 49M | 94M | 17M | -12M |
| Other Non-Cash Items | -604M | -619M | -19M | -113M | -106M | -505M | -21M | 274M | 65M | -1.13B | -62M | 0 | -188M | -4M | -183M | -425M | -22M | -16M | 68M | -7M | 11M | 87M | 175M | 106M | 47M | 24M | 102M | -4M | 14M | -1M | -10M |
| Working Capital Changes | 299M | 0 | -219M | -225M | -648M | -287M | 830M | 64M | -341M | 100M | -138M | -396M | -308M | -226M | 205M | -122M | -202M | 659M | -89M | -244M | -1M | -146M | -252M | 42M | 247M | 190M | -277M | -8M | -139M | -19M | 46M |
| Change in Receivables | -420M | -420M | -73M | -341M | -743M | -271M | 219M | 200M | -151M | -231M | -170M | 5M | -205M | -231M | 108M | -219M | -305M | 440M | 128M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -256M | -256M | -566M | -282M | -490M | -629M | 371M | -60M | -242M | -202M | 34M | -20M | -152M | -92M | 166M | -113M | -219M | 292M | 118M | -79M | -129M | -28M | -102M | 79M | 13M | 149M | -13M | 7M | -38M | -53M | 36M |
| Change in Payables | 332M | 332M | 399M | 256M | 334M | 832M | 76M | 147M | 23M | 388M | 0 | -120M | 49M | 86M | -220M | 92M | 322M | -73M | -208M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -13.71B | -1.1B | -271M | -2.58B | -1.2B | -1.76B | 397M | -1.87B | -398M | -217M | -529M | -575M | 143M | -202M | -6.97B | -800M | -1.01B | -225M | -3.2B | -1.46B | -1.01B | -1.27B | -333M | -969M | -415M | -59M | -24M | -1.64B | -281M | -531M | -492M |
| Capital Expenditures | -46M | 0 | -808M | -757M | -598M | -575M | -389M | -587M | -565M | -520M | -497M | -506M | -632M | -614M | -593M | -568M | -394M | -195M | -448M | -354M | -360M | -363M | -330M | -273M | -228M | -295M | -386M | -496M | -483M | -438M | -347M |
| CapEx % of Revenue | 0.16% | - | 3.25% | 3.26% | 2.88% | 2.93% | 2.18% | 2.74% | 2.61% | 2.55% | 2.52% | 2.43% | 2.8% | 2.79% | 3.64% | 3.54% | 2.87% | 1.64% | 2.91% | 2.72% | 2.91% | 3.29% | 3.36% | 3.39% | 3.16% | 4.04% | 4.65% | 5.9% | 7.29% | 5.79% | 4.98% |
| Acquisitions | -12.56B | -1.49B | -87M | 0 | -621M | -1.5B | 1.21B | -1.22B | 0 | 607M | 1M | -71M | 284M | 768M | -6.94B | -325M | -222M | 14M | -2.78B | -1.31B | -191M | -911M | -627M | -252M | -153M | -35M | -115M | -1.6B | -117M | -387M | -151M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -982M | -950M | 624M | 43M | 38M | 306M | -422M | -63M | -543M | -526M | -490M | -541M | -663M | -682M | -639M | 93M | -396M | 20M | 31M | -39M | -42M | 10M | 18M | -15M | 5M | 22M | 477M | 460M | 319M | 294M | 6M |
| Cash from Financing | 7.87B | -3.17B | -3.94B | -871M | -1.34B | -535M | -3.26B | -1.49B | -2.58B | -2.44B | -1.74B | -2.31B | -2.13B | -1.74B | 5.48B | -381M | -261M | -1.06B | 1.83B | 327M | -416M | 158M | -481M | 81M | -522M | -676M | -388M | 957M | -334M | -201M | -235M |
| Debt Issued (Net) | 10.51B | 0 | 61M | 488M | 300M | 805M | -503M | 725M | -164M | -554M | -22M | -602M | -582M | -1.09B | 5.83B | 300M | -47M | -753M | 667M | 735M | 54M | 722M | -206M | -194M | -444M | -581M | 145M | 919M | 124M | 211M | -66M |
| Equity Issued (Net) | 625M | -1.86B | -2.49B | 78M | -258M | -169M | -1.54B | -1.07B | -1.24B | -784M | -748M | -630M | -650M | 121M | 159M | -272M | 157M | 27M | 1.47B | -340M | -278M | -382M | -112M | 409M | 45M | 25M | -417M | 142M | -349M | -279M | -45M |
| Dividends Paid | -1.64B | -1.63B | -1.5B | -1.38B | -1.3B | -1.22B | -1.18B | -1.2B | -1.15B | -1.07B | -1.04B | -1.03B | -929M | -796M | -512M | -462M | -363M | -334M | -320M | -251M | -220M | -184M | -163M | -134M | -123M | -120M | -127M | -128M | -126M | -133M | -124M |
| Share Repurchases | 585M | -1.86B | -2.49B | 0 | -286M | -122M | -1.61B | -1.03B | -1.27B | -850M | -730M | -682M | -650M | 0 | 0 | -343M | 0 | 0 | -100M | -340M | -386M | -450M | -250M | 0 | 0 | -12M | -417M | -5M | -349M | -315M | -63M |
| Other Financing | -1.62B | 315M | -5M | -58M | -83M | 48M | -43M | 57M | -26M | -36M | 69M | -47M | 31M | 26M | 1M | 53M | 149M | -1M | 13M | 183M | 28M | 2M | 0 | 0 | 0 | 0 | 11M | 24M | 17M | 0 | 0 |
| Net Change in Cash | -1.08B | 198M | 67M | 194M | -3M | -141M | 68M | 87M | -278M | 18M | 275M | -513M | -134M | 338M | 192M | 52M | -7M | 152M | 46M | 28M | 4M | 110M | 24M | -14M | -37M | 30M | 3M | 1M | 27M | 31M | -34M |
| Free Cash Flow | 4.7B | 4.47B | 3.52B | 2.87B | 1.94B | 1.59B | 2.56B | 2.86B | 2.09B | 2.15B | 2.07B | 1.9B | 1.25B | 1.67B | 1.07B | 680M | 888M | 1.21B | 968M | 807M | 1.07B | 772M | 508M | 601M | 672M | 470M | 29M | 186M | 159M | 325M | 346M |
| FCF Margin % | 16.46% | 16.29% | 14.14% | 12.36% | 9.32% | 8.09% | 14.31% | 13.39% | 9.69% | 10.52% | 10.5% | 9.12% | 5.53% | 7.58% | 6.57% | 4.24% | 6.47% | 10.22% | 6.3% | 6.19% | 8.66% | 7.01% | 5.17% | 7.46% | 9.32% | 6.44% | 0.35% | 2.21% | 2.4% | 4.3% | 4.97% |
| FCF Growth % | 41.5% | 27.08% | 22.74% | 48.17% | 21.85% | -37.85% | -10.79% | 36.84% | -2.47% | 3.52% | 8.93% | 52.73% | -25.43% | 56.02% | 57.5% | -23.42% | -26.79% | 25.31% | 19.95% | -24.65% | 38.73% | 51.97% | -15.47% | -10.57% | 42.98% | 1520.69% | -84.41% | 16.98% | -51.08% | -6.07% | 39.52% |
| FCF per Share | 12.06 | 11.48 | 8.81 | 7.15 | 4.83 | 3.95 | 6.32 | 6.81 | 4.79 | 4.80 | 4.54 | 4.07 | 2.61 | 3.51 | 3.05 | 1.98 | 2.62 | 3.61 | 2.98 | 2.68 | 3.50 | 2.51 | 1.62 | 2.00 | 2.34 | 1.67 | 0.10 | 0.63 | 0.55 | 1.04 | 1.12 |
| FCF Conversion (FCF/Net Income) | 1.18x | 1.09x | 1.14x | 1.13x | 1.03x | 1.01x | 2.09x | 1.56x | 1.24x | 0.89x | 1.34x | 1.22x | 1.05x | 1.23x | 1.37x | 0.92x | 1.38x | 3.68x | 1.34x | 1.17x | 1.51x | 1.41x | 1.29x | 2.26x | 3.20x | 4.53x | 0.92x | 1.11x | 1.84x | 1.86x | 1.99x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working Capital Volatility
As reported in recent financial statements, ETN's operating cash flow to net income ratio fluctuated significantly, reaching a low of 0.59 in 2026Q1, which suggests that the company's ability to convert accounting profits into tangible cash remains highly sensitive to timing and working capital requirements.
The divergence between net income and operating cash flow in the most recent quarter indicates that earnings quality may be temporarily pressured by non-cash accruals or timing differences in project-based revenue recognition. Investors should monitor whether this trend persists, as a sustained inability to align cash generation with reported income could signal underlying inefficiencies in the collection cycle.
Based on Eaton's reported figures, free cash flow margins have exhibited extreme variance, swinging from a robust 30.4% in 2025Q4 to a mere 4.2% in 2026Q1, highlighting the cyclical nature of the company's cash generation relative to its aggressive capital deployment and operational needs.
The sharp contraction in FCF margin during the most recent quarter appears to be driven by significant cash outflows related to acquisition activity rather than a fundamental deterioration in core profitability. While the company maintains the capacity to generate strong cash flows, the current trajectory suggests that large-scale capital allocation decisions are currently overshadowing operational cash flow stability.
According to SEC filings, ETN experienced a substantial $614 million working capital outflow in 2026Q1, a sharp reversal from the $438 million inflow seen in 2024Q4, which underscores the inherent difficulty in managing inventory and receivables within a complex, project-heavy industrial manufacturing environment.
The volatility in working capital suggests that the company is currently absorbing significant cash to support its expanding backlog and supply chain requirements. This pattern warrants further investigation to determine if these outflows represent a strategic build-up of inventory to mitigate supply chain risks or a potential inefficiency in the cash conversion cycle.
As indicated by the company's recent financial disclosures, ETN utilized $11.1 billion for acquisitions in 2026Q1, a massive departure from historical norms that suggests management is prioritizing inorganic growth over traditional share repurchases or debt reduction in the current high-demand industrial environment.
This significant capital outlay indicates a pivot toward aggressive expansion, likely aimed at securing long-term competitive advantages in the electrical infrastructure space. While this strategy may enhance future earnings power, it places immediate pressure on the company's cash position and requires careful monitoring of the integration success and return on invested capital.
Quick answers to the most common questions about buying ETN stock.
Eaton Corporation plc (ETN) generated $4.47B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Eaton Corporation plc (ETN) generated $4.47B 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.
Eaton Corporation plc (ETN) spent $0.0M 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, Eaton Corporation plc (ETN) returned $1.63B to shareholders via cash dividends and spent $1.86B on share repurchases. This shows the company's commitment to returning capital to its equity investors.