Free cash flow remains consistently negative, with the quarterly burn rate accelerating to $9.5 million in 2026Q3, partially masked by $5.8 million in stock-based compensation.
| Cash from Operations | -17.67M | -12.78M | -3.31M | -1.01M | -1.62M |
| Operating CF Margin % | - | - | - | - | - |
| Operating CF Growth % | -232.91% | -286.27% | -227.54% | 37.78% | - |
| Net Income | -33.03M | 7.14M | -8.16M | -1.17M | -1.65M |
| Depreciation & Amortization | 274.89K | 189.36K | 56K | 26.95K | 24.26K |
| Stock-Based Compensation | 10.75M | 2.05M | 66K | 54.63K | 0 |
| Deferred Taxes | 0 | 0 | 0 | -15.94K | 0 |
| Other Non-Cash Items | 11.87M | -25.22M | 4.14M | 129.84K | 23.41K |
| Working Capital Changes | -902.67K | 3.07M | 586K | -35.75K | -17.94K |
| Change in Receivables | -162.69K | 440.47K | -402K | -15K | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 634.82K | -49.4K | 184K | 0 | 0 |
| Cash from Investing | -960.04K | -194.85K | -209K | -77.21K | -130.57K |
| Capital Expenditures | -960.04K | -194.85K | 0 | -77.21K | -44.41K |
| CapEx % of Revenue | - | - | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - |
| Other Investing | 0 | 0 | -209K | 0 | -86.17K |
| Cash from Financing | 30.67M | 20.84M | 5.11M | 1.31M | 1.6M |
| Debt Issued (Net) | 0 | 0 | 6.71M | 1.31M | 1.6M |
| Equity Issued (Net) | 25.36M | 16.89M | 0 | -270.96K | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 5.31M | 3.95M | -1.61M | 270.96K | 0 |
| Net Change in Cash | 12.05M | 7.86M | 1.59M | 223.65K | -154.98K |
| Free Cash Flow | -18.63M | -12.97M | -3.52M | -1.09M | -1.75M |
| FCF Margin % | - | - | - | - | - |
| FCF Growth % | -57.94% | -268.86% | -223.5% | 38.01% | - |
| FCF per Share | -0.42 | -0.42 | -0.33 | -0.15 | -0.25 |
| FCF Conversion (FCF/Net Income) | 0.56x | -2.46x | 0.41x | 0.81x | 0.98x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 1.13M | 0 | 0 |
Binary certification failure risk
According to the provided financial data, the relationship between net income and operating cash flow is highly erratic, with the OCF/NI ratio reaching 1.36 in 2026Q3, suggesting that non-cash charges and working capital movements are significantly obscuring the underlying cash-generative capacity of the business.
The wide variance in the OCF/NI ratio indicates that net income is an unreliable proxy for the company's actual liquidity position. Investors should note that the divergence between accounting losses and cash outflows is primarily driven by non-cash stock-based compensation and volatile working capital adjustments rather than operational efficiency.
As reported in financial statements, HOVR has consistently generated negative free cash flow over the last ten quarters, with the quarterly burn rate accelerating to $9.5 million in 2026Q3, reflecting the heavy capital requirements inherent in the pre-revenue aerospace development cycle.
The trajectory of free cash flow confirms that the company is in a deep investment phase with no immediate path to self-funding. The lack of positive FCF margins underscores the necessity for external financing to sustain operations until the Cavorite X7 reaches commercial viability.
Based on reported figures, working capital changes have been highly inconsistent, swinging from a $4.4 million outflow in 2026Q3 to a $1.7 million inflow in 2026Q1, which suggests that the company's cash position is sensitive to timing differences in payables and inventory management.
This volatility in working capital suggests that management is likely managing cash outflows tightly to preserve liquidity during the development phase. Investors should monitor whether these fluctuations represent sustainable efficiency gains or merely the deferral of obligations that will eventually require settlement.
Analysis of the cash flow statement reveals that stock-based compensation, which reached $5.8 million in 2026Q3, is a primary non-cash adjustment that masks the true economic cost of talent acquisition required to maintain the company's engineering roadmap.
By adding back significant stock-based compensation to net income, the company presents an operating cash flow figure that may appear less severe than the actual cash-equivalent cost of operations. This accounting treatment warrants further investigation into the dilution impact on shareholders as the company continues to fund its R&D through equity.
Quick answers to the most common questions about buying HOVR stock.
New Horizon Aircraft Ltd. (HOVR) generated $-12.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
New Horizon Aircraft Ltd. (HOVR) reported negative free cash flow of $13.0M in 2025, indicating capital requirements exceeded cash from operations.
New Horizon Aircraft Ltd. (HOVR) spent $0.2M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.