Operational strain is evident as the company continues to burn cash, reporting a negative free cash flow of $778,000 in 2026Q1 despite minimal capital expenditure.
| Cash from Operations | -3.05M | -14.06M | -324K | 7.04M | 21.99M | -45.07M | -44.83M | -13.3M | 4.44M | -17.85M | 8.66M |
| Operating CF Margin % | - | -10.47% | -0.17% | 3.11% | 6.38% | -9.4% | -13.1% | -5.66% | 2.09% | -8.84% | 3.17% |
| Operating CF Growth % | -111.59% | -4239.2% | -104.6% | -67.97% | 148.79% | -0.54% | -236.98% | -399.8% | 124.85% | -306.06% | - |
| Net Income | -290.02M | -289.79M | -66.72M | -64.81M | -285.42M | 13.42M | -7.27M | -40.08M | -35.54M | -82.77M | 15.78M |
| Depreciation & Amortization | 16.86M | 23.14M | 30.69M | 32.08M | 41.53M | 14.93M | 6.78M | 7M | 8.26M | 4.04M | 1.24M |
| Stock-Based Compensation | 872K | 1.18M | 2.38M | 5.08M | 8.35M | 5.01M | 8.89M | 208K | 0 | 0 | 6.48M |
| Deferred Taxes | 0 | 0 | 0 | 2K | -9.31M | -21M | 52K | -718K | -899K | 0 | 0 |
| Other Non-Cash Items | 249.49M | 246.86M | 23.59M | 22.35M | 227.27M | 5.5M | -9.46M | 19.71M | 8.3M | 57.81M | 6.01M |
| Working Capital Changes | 19.73M | 4.55M | 9.73M | 12.36M | 39.57M | -62.93M | -43.82M | 581K | 21.89M | 3.06M | -20.85M |
| Change in Receivables | 8.56M | 5.71M | 1.62M | 766K | 16.66M | -1.93M | -6.33M | -620K | 6.82M | 2.92M | -6.33M |
| Change in Inventory | 15.04M | 12.12M | 14.41M | 26.11M | 57.02M | -46.85M | -36.86M | 2.73M | 22.04M | -10.38M | -11.12M |
| Change in Payables | -1.68M | -2.66M | 56K | -1.1M | -12M | -12.3M | 4.79M | -1.2M | -5.65M | 0 | 0 |
| Cash from Investing | -612K | -841K | 1.67M | -4.17M | -8.49M | -468.18M | 546K | -3.82M | -3.31M | -277.17M | -6.07M |
| Capital Expenditures | 244K | 0 | -2.89M | -4.21M | -8.23M | -5.4M | -1.45M | -768K | -1.34M | -1.75M | -959K |
| CapEx % of Revenue | 0.2% | 0.76% | 1.52% | 1.86% | 2.39% | 1.13% | 0.42% | 0.33% | 0.63% | 0.87% | 0.35% |
| Acquisitions | 0 | 0 | 0 | 0 | 190K | -462.17M | 0 | 0 | 0 | -286.03M | -3.24M |
| Investments | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -856K | -841K | 4.56M | 45K | -448K | -610K | 1.99M | -3.05M | -1.97M | 10.61M | -1.88M |
| Cash from Financing | -5.17M | -5.44M | -4.78M | 6.07M | -20.2M | 464.71M | 88.14M | 19.9M | 25.52M | 296.22M | -2.05M |
| Debt Issued (Net) | 396K | -4.93M | -4.63M | -1.25M | -1.5M | 119.5M | -94.78M | 77K | -23.41M | 0 | 0 |
| Equity Issued (Net) | 0 | 0 | 0 | 0 | 0 | 309.78M | 183.61M | 14.16M | 52.65M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -12M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | -2.6M | 0 | 0 | 0 | 0 |
| Other Financing | -5.57M | -509K | -142K | 7.32M | -18.7M | 35.42M | -687K | 5.66M | -3.72M | 296.22M | 9.95M |
| Net Change in Cash | -8.38M | -19.8M | -4.2M | 9.02M | -7.09M | -48.57M | 44.1M | 4.93M | 25.72M | 2.94M | 133K |
| Free Cash Flow | -2.83M | -15.08M | -3.22M | 2.83M | 13.76M | -50.47M | -46.27M | -14.07M | 3.09M | -19.6M | 7.71M |
| FCF Margin % | -2.32% | -11.23% | -1.69% | 1.25% | 3.99% | -10.53% | -13.52% | -5.98% | 1.46% | -9.7% | 2.82% |
| FCF Growth % | 75.36% | -369% | -213.68% | -79.44% | 127.26% | -9.07% | -228.87% | -554.75% | 115.78% | -354.41% | - |
| FCF per Share | -0.59 | -3.23 | -0.70 | 0.62 | 3.06 | -11.74 | -13.81 | -4.26 | 0.44 | -15.36 | 6.04 |
| FCF Conversion (FCF/Net Income) | 0.01x | 0.05x | 0.00x | -0.11x | -0.08x | -3.36x | 6.16x | 0.33x | -0.13x | 0.22x | 0.55x |
| Interest Paid | -5.21M | 0 | 13.29M | 0 | 9.64M | 1.62M | 23.14M | 5.49M | 4.71M | 0 | 0 |
| Taxes Paid | -110K | 0 | 201K | 0 | 3.91M | 1.96M | 94K | 63K | 613K | 0 | 0 |
Liquidity and insolvency risk
As reported in recent financial filings, the persistent gap between net losses and operating cash flow, exemplified by the 2025Q1 OCF/NI ratio of 0.82, suggests that Hydrofarm's accounting losses are not merely non-cash items but reflect a fundamental inability to generate positive cash from core operations.
The consistent failure to bridge the gap between net income and operating cash flow indicates that the company's accrual-based losses are being compounded by cash-based operational inefficiencies. Investors should monitor whether the company can achieve a positive OCF/NI conversion, as current figures suggest that the business model is currently consuming rather than generating liquidity.
Based on the provided quarterly data, Hydrofarm's free cash flow trajectory remains deeply negative, with the company reporting a -$778,000 FCF in 2026Q1, underscoring a structural inability to fund operations through internal cash generation despite significant reductions in capital expenditure intensity over the last ten quarters.
The inability to sustain positive free cash flow, even with minimal capital investment, suggests that the company's fixed cost base is misaligned with current revenue levels. This trend warrants further investigation into whether the firm can reach a cash-flow-neutral state before its limited liquidity reserves are fully exhausted.
According to historical cash flow statements, working capital changes have been highly erratic, swinging from a $6.9 million inflow in 2026Q1 to an $8.3 million outflow in 2025Q1, which suggests that the company is relying on aggressive inventory management to manage its precarious cash position.
The reliance on working capital fluctuations to stabilize cash flow appears to be a stop-gap measure rather than a sustainable operational strategy. This volatility implies that the company may be liquidating inventory at suboptimal prices to meet immediate obligations, which could further erode future gross margins.
As indicated by the company's financial disclosures, the consistent use of stock-based compensation and significant depreciation and amortization charges, such as the $7.3 million D&A in 2025Q3, effectively mask the true cash-burning nature of the business by inflating reported operating cash flow metrics.
While D&A is a non-cash expense, the magnitude of these charges relative to the company's negative net income suggests that past capital investments are failing to provide the expected economic returns. Analysts should be wary of relying on OCF as a proxy for health, as these adjustments may hide the underlying cash drain.
Quick answers to the most common questions about buying HYFM stock.
Hydrofarm Holdings Group, Inc. (HYFM) generated $-14.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Hydrofarm Holdings Group, Inc. (HYFM) reported negative free cash flow of $15.1M in 2025, indicating capital requirements exceeded cash from operations.
Hydrofarm Holdings Group, Inc. (HYFM) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.