Hayward Holdings, Inc. (HAYW) Cash Flow Statement

The operating cash flow to net income ratio swung from -6.45x in Q1 2026 to 8.79x in Q2 2026, a pattern that suggests reported profits are not converting to cash on a consistent basis. Such volatility appears more consistent with distributor sell-in timing and inventory cycles than with underlying customer demand, and investors should monitor whether the strong Q2 conversion reverses in subsequent periods. Earnings may therefore be a weaker guide to cash generating capacity than headline net income implies.

Such large reversals suggest that distributor purchasing patterns, rather than end-consumer pool service demand, are shaping reported cash flow in the near term. The pattern may indicate that Q2 inflows partly reflect collections on sell-in made earlier in the year, which would make the subsequent quarters more sensitive to any destocking. Investors should monitor receivables and inventory days to determine whether the reversal reflects genuine cash realization or temporary timing.

Free cash flow margins swung from -61.8% to 122.7% within the same fiscal year, which makes any single-quarter read misleading for valuation purposes. The longer-run figures across the ten quarters suggest the business produces positive cumulative cash, but the magnitude appears more modest than the peak quarter implies. Analysts should evaluate normalized free cash flow over a full annual cycle rather than extrapolating recent quarters.

Capex consistently remained in the $4M to $11M quarterly range against depreciation and amortization of roughly $14M per quarter, suggesting maintenance-level investment with limited growth spending. This implies that a meaningful portion of depreciation is not being replaced in cash terms, which could flatter reported free cash flow if asset refresh needs rise. Investors should monitor whether capex rises toward depreciation levels as automation and manufacturing requirements evolve.