FTI Consulting, Inc. (FCN) Cash Flow Statement

Net income stayed in a fairly narrow band of roughly $50M to $83M per quarter, yet operating cash flow ranged from negative values to over $350M, so the OCF-to-net-income ratio swung between about -7.5x and 6.6x. This gap suggests that reported earnings are a poor short-term proxy for cash generation and that timing of working capital, particularly receivables tied to protracted restructuring and litigation mandates, is driving most of the variance. Investors should monitor whether the multi-quarter average conversion converges toward a more consistent level over a full cycle.

The magnitude of these working capital outflows, followed by large inflows such as the $181.0M in 2024Q4 and $64.9M in 2026Q3, implies that receivable collection and billing timing are the main cash levers rather than operating profitability. This pattern is consistent with professional services firms that bill against milestones and success fees, where cash can lag revenue recognition substantially. The trend warrants monitoring of days sales outstanding to determine whether the swings reflect timing or a more persistent collection challenge.

Free cash flow of $182.0M in 2026Q3 and $151.4M in 2026Q2 suggests the business can produce substantial cash in favorable working capital conditions, though the preceding negative quarters limit confidence in the sustainability of these margins. Capex remains very light at roughly 0.1% to 1.5% of revenue, so FCF is driven almost entirely by operating dynamics rather than investment intensity. The key question for analysts is whether recent positive FCF reflects structural improvement or a reversal of earlier timing effects.

Depreciation and amortization of roughly $11M to $13M per quarter exceeds most reported capex figures, suggesting the company is not currently reinvesting heavily in physical assets to sustain operations. This implies that cash generation is largely unencumbered by maintenance capital needs, which supports conversion quality when working capital is stable. Investors may still want to assess whether underinvestment in technology infrastructure, given the Technology segment's reliance on data processing, could create future capex requirements.

Share repurchases have tended to be largest in quarters following strong cash generation, which suggests management allocates surplus cash to buybacks rather than holding it, and the absence of dividends is consistent with a growth-oriented capital return approach. The scale of buybacks relative to the volatile cash base means that repurchases may be funded partly from timing-driven inflows that could reverse. Analysts should watch whether buybacks continue at this pace if working capital unwinds.