Capital intensity remains high with a CapEx/Revenue ratio of 8.9% in 2026Q1, contributing to inconsistent free cash flow generation and a liquidity buffer that is constrained by a current ratio of 0.29.
| Cash from Operations | 140.23M | 125.91M | 115.67M | 95.34M | 62.94M | 62.97M | -18.36M | 21.46M | 30.77M |
| Operating CF Margin % | - | 10.3% | 11.39% | 10.69% | 8.62% | 10.47% | -5.36% | 4.92% | 8.8% |
| Operating CF Growth % | 108.73% | 8.85% | 21.33% | 51.48% | -0.05% | 442.9% | -185.55% | -30.25% | - |
| Net Income | 17.58M | 19.43M | 18.93M | 25.39M | 6.91M | -2.11M | -49.68M | -45.47M | -12.3M |
| Depreciation & Amortization | 79.85M | 75.01M | 57.72M | 41.22M | 34.23M | 32.38M | 30.73M | 28.03M | 26.12M |
| Stock-Based Compensation | 11.85M | 10.76M | 8.53M | 7.6M | 10.37M | 8.6M | 750K | 1.16M | 1.3M |
| Deferred Taxes | -10.21M | -10.03M | 6.82M | 8.31M | 4.68M | 2.18M | -19.99M | -12.56M | -538K |
| Other Non-Cash Items | 35.31M | 33.9M | 28M | 20.09M | 17.18M | 15.96M | 13.32M | 45.34M | 5.57M |
| Working Capital Changes | 5.84M | -3.16M | -4.31M | -7.27M | -10.44M | 5.96M | 6.51M | 4.97M | 10.07M |
| Change in Receivables | -71K | 376K | -1.7M | 632K | -1.71M | -535K | 1.83M | -3.19M | -332K |
| Change in Inventory | -747K | -867K | -508K | -62K | -1M | -1.11M | -203K | -439K | -432K |
| Change in Payables | 2.07M | 1.74M | 637K | -1.3M | -3.47M | 6.7M | -866K | -740K | 0 |
| Cash from Investing | -206.69M | -213.76M | -206.65M | -123.37M | -63.11M | -35.68M | -26.97M | -82.39M | -51.9M |
| Capital Expenditures | -149.69M | -156.91M | -128.05M | -84.69M | -63.33M | -35.68M | -26.97M | -59.17M | -37.73M |
| CapEx % of Revenue | 11.78% | 12.83% | 12.6% | 9.5% | 8.67% | 5.94% | 7.88% | 13.56% | 10.79% |
| Acquisitions | -56.17M | -56.01M | -78.64M | -39.88M | 0 | 0 | 0 | -23.22M | -14.17M |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | -828K | -850K | 34K | 1.2M | 219K | 0 | 0 | 0 | -14.17M |
| Cash from Financing | 71.42M | 75.79M | 74.33M | 28.07M | -2.02M | -14.27M | 73.31M | 55.76M | 30.28M |
| Debt Issued (Net) | -4.32M | 74.59M | 70.71M | 22.44M | -3.37M | -189.25M | 33.31M | 56.9M | 30.28M |
| Equity Issued (Net) | -44K | 1.19M | 6.43M | 0 | 0 | 182.09M | 40M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 75.79M | 0 | -2.81M | 5.63M | 1.35M | -7.12M | 0 | -1.14M | 0 |
| Net Change in Cash | 4.96M | -12.07M | -16.65M | 38K | -2.19M | 13.02M | 27.98M | -5.16M | 16.28M |
| Free Cash Flow | -9.46M | -30.99M | -12.28M | 10.65M | -393K | 27.29M | -45.34M | -37.7M | -6.95M |
| FCF Margin % | -0.74% | -2.54% | -1.21% | 1.19% | -0.05% | 4.54% | -13.24% | -8.64% | -1.99% |
| FCF Growth % | 62.44% | -152.48% | -215.27% | 2809.92% | -101.44% | 160.19% | -20.25% | -442.19% | - |
| FCF per Share | -0.15 | -0.49 | -0.20 | 0.17 | -0.01 | 0.57 | -0.77 | -0.64 | -0.15 |
| FCF Conversion (FCF/Net Income) | -0.54x | 6.48x | 6.11x | 3.76x | 9.11x | -29.89x | 0.37x | -0.47x | -2.50x |
| Interest Paid | -3.07M | 0 | 12.33M | 8.72M | 3.37M | 16.15M | 19.82M | 18.93M | 0 |
| Taxes Paid | -101K | 0 | 3.11M | 1.95M | 915K | 79K | 163K | 152K | 0 |
Capital intensity outpacing cash
As reported in financial statements, FWRG exhibits a significant disconnect between net income and operating cash flow, with the OCF/NI ratio reaching an extreme 32.80 in 2024Q4, suggesting that reported earnings are currently a poor proxy for the company's actual ability to generate cash from operations.
The wide variance between net income and operating cash flow indicates that non-cash charges and working capital adjustments are heavily influencing the bottom line. Investors should monitor whether this divergence persists, as it may imply that the company's accounting earnings are not yet supported by sustainable cash generation.
Based on recent SEC filings, FWRG's free cash flow trajectory remains highly inconsistent, with the company reporting negative FCF in six of the last ten quarters, including a -$17.8M outflow in 2024Q4, which highlights the difficulty of self-funding aggressive unit expansion through internal cash generation.
The persistent inability to generate positive free cash flow suggests that the company is reliant on external financing or capital recycling to maintain its growth pace. This trend warrants further investigation into whether the current unit-level economics can eventually support the capital requirements of a national footprint.
According to quarterly data, FWRG maintains a high capital intensity, with CapEx/Revenue ratios consistently exceeding 11% over the last ten quarters, peaking at 15.4% in 2024Q4, which reflects the heavy upfront investment required to build out new company-owned restaurant locations across diverse geographic markets.
The high level of capital expenditure relative to revenue suggests that the company is prioritizing rapid scale over immediate cash flow optimization. This aggressive deployment of capital into new builds may leave the company vulnerable if the return on these new units fails to meet internal hurdle rates.
As indicated by historical cash flow statements, FWRG has utilized significant capital for the acquisition of franchised units, including a $73.7M outlay in 2024Q2, which appears to be a strategic pivot toward consolidating control over the brand's operational footprint at the expense of current cash reserves.
This shift toward re-acquiring franchised locations increases the company's direct exposure to store-level operating risks and labor inflation. Investors should monitor whether these acquisitions provide the expected margin accretion or if they merely add to the company's fixed-cost burden during periods of economic uncertainty.
Quick answers to the most common questions about buying FWRG stock.
First Watch Restaurant Group, Inc. (FWRG) generated $125.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
First Watch Restaurant Group, Inc. (FWRG) reported negative free cash flow of $31.0M in 2025, indicating capital requirements exceeded cash from operations.
First Watch Restaurant Group, Inc. (FWRG) spent $156.9M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.