Inter Parfums, Inc. (IPAR) Cash Flow Statement

The wide dispersion suggests that reported net income is not a reliable proxy for cash generation in any single quarter. The Q3 2026 ratio below 1.0 alongside $68.2M of net income implies that roughly $40.1M of working capital absorption offset earnings, which warrants monitoring of whether this reflects seasonal inventory or receivables build. Investors should treat the strong Q4 2024 and Q4 2025 conversion as seasonal collection effects rather than a durable earnings-quality improvement.

The alternation between negative and strongly positive quarters points to a cash profile driven by working capital timing rather than steady operating output. The Q3 2026 margin of 12.8% is closer to the mid-teens levels seen in several non-Q4 periods, which may indicate a more normalized run rate. Investors should monitor whether trailing free cash flow stabilizes above low double digits before inferring a durable improvement in cash economics.

The magnitude of these swings relative to quarterly net income suggests that working capital management, rather than operating earnings, determines reported cash outcomes in most periods. The Q3 2026 outflow alongside strong earnings may reflect inventory build ahead of holiday demand, though the reported data does not isolate the components. Analysts should examine receivables and inventory balances directly to determine whether the outflow is seasonal or indicates slower sell-through.

The low routine capex intensity is consistent with a licensing and outsourced-manufacturing model that avoids heavy fixed asset investment. The Q2 2025 spike to roughly 5.0% of revenue stands out as an outlier and may reflect a discrete facility or systems investment, though the data does not confirm its nature. Investors should confirm whether such episodes recur, since they would materially alter the otherwise capital-light free cash flow profile.

The steady dividend outflow appears largely insulated from quarterly cash volatility, which implies management is prioritizing a predictable shareholder payout. The limited buyback activity and modest acquisition outflows suggest capital is not being redeployed aggressively into growth or share count reduction. Investors should assess whether dividend coverage by free cash flow remains adequate during weak working capital quarters such as Q1 2025, when free cash flow was negative.