Helios Technologies, Inc. (HLIO) Cash Flow Statement

The OCF/NI ratio has consistently remained above 1.0 across the past ten quarters, with a notable spike to 7.44 in 2024Q4, suggesting that reported earnings are backed by strong cash generation. The gap between net income and operating cash flow is primarily driven by non-cash charges like D&A, which averaged around $15M per quarter, and favorable working capital movements. This implies that earnings quality is high, as cash flows are not being artificially inflated by aggressive accruals.

The FCF trajectory shows a clear upward trend, with 2026Q2 FCF nearly tripling year-over-year, driven by revenue growth and improved working capital management. FCF margins have expanded from 5.8% in 2024Q1 to 13.2% in 2026Q2, indicating that the company is converting a larger share of sales into free cash flow. This improvement suggests that the operational leverage highlighted in the income statement is translating into cash generation, though the implied sequential decline in forward revenue guidance warrants monitoring for potential demand softening.

Capital expenditures have remained relatively stable, ranging from 2.5% to 4.9% of revenue, which is modest for an industrial manufacturer. This suggests that the company is not in a heavy investment phase, and the moderate capital intensity allows for strong FCF generation. The consistency of CapEx relative to revenue implies that maintenance capex is well-covered, and any growth capex is being funded by operating cash flow without straining the balance sheet.

The working capital line item has been highly volatile, with positive contributions in some quarters (e.g., +$17.9M in 2024Q4) and negative in others (e.g., -$13.9M in 2024Q1). This suggests that the company's cash flow is sensitive to inventory build-ups and receivable collections, which may reflect the cyclical nature of its end markets. The recent positive swing in 2026Q2 indicates improved efficiency in managing working capital, but investors should monitor whether this is sustainable given the implied sequential revenue decline.

The company has consistently returned capital to shareholders through dividends, with quarterly dividends stable around $3M, and has also engaged in modest buybacks, particularly in recent quarters. However, the significant acquisition-related cash outflow of $47.4M in 2025Q4 highlights the company's aggressive M&A strategy, which may have increased debt levels. The balance between returning cash to shareholders and pursuing growth through acquisitions suggests a deliberate capital allocation policy, though the return on these acquisitions remains to be fully demonstrated.

The cumulative gap between operating cash flow and net income is substantial, with OCF exceeding NI by $186.1M over the ten-quarter period. This divergence is largely attributable to non-cash charges such as D&A and stock-based compensation, which are added back to net income to arrive at OCF. The persistent excess of OCF over NI suggests that the company's earnings are of high quality and that cash generation is robust, which may support the sustainability of dividends and future investments.