Free cash flow remains deeply negative with a -114.7% margin in 2026Q3, driven by a high CapEx-to-revenue ratio of 39.9% required to support the ASSURE system deployment.
| Cash from Operations | -86.68M | -77.61M | -72.23M | -69.64M | -29.89M | -30.29M |
| Operating CF Margin % | - | -129.75% | -259.71% | -912.74% | - | - |
| Operating CF Growth % | -60.2% | -7.44% | -3.72% | -132.96% | 1.31% | - |
| Net Income | -144.83M | -113.81M | -94.12M | -84.24M | -34.1M | -29.47M |
| Depreciation & Amortization | 8.22M | 7.97M | 11.56M | 4.86M | 420K | 478K |
| Stock-Based Compensation | 45.65M | 24.27M | 1.49M | 1.21M | 1.86M | 0 |
| Deferred Taxes | 0 | 64K | 12K | -45K | 0 | 0 |
| Other Non-Cash Items | 6.79M | 10.11M | 4.44M | 7.28M | 1.94M | 706K |
| Working Capital Changes | -3.46M | -6.2M | 4.39M | 1.3M | -19K | -2.01M |
| Change in Receivables | -1.33M | -8.78M | -2M | 0 | 0 | 0 |
| Change in Inventory | -766K | -3.44M | -1.18M | -733K | 0 | 0 |
| Change in Payables | -843K | 2.84M | 7.34M | 2.14M | -132K | -790K |
| Cash from Investing | -38.33M | -23.31M | -12.23M | -15.46M | -334K | -232K |
| Capital Expenditures | -33.27M | -23.59M | -12.51M | -15.46M | -336K | -232K |
| CapEx % of Revenue | 39.74% | 39.44% | 44.99% | 202.63% | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - |
| Other Investing | -5.06M | 283K | 285K | 0 | 2K | 0 |
| Cash from Financing | 361.98M | 330.26M | 77.72M | 96.11M | 48.81M | 30.24M |
| Debt Issued (Net) | 0 | 0 | 5.88M | -5.33M | 20M | 0 |
| Equity Issued (Net) | -1000K | 1000K | 1000K | 1000K | 0 | 0 |
| Dividends Paid | -31K | -1.65M | -799K | -671K | -187K | -183K |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 387.01M | 12.73M | -2.35M | 0 | 29M | 30.42M |
| Net Change in Cash | 236.97M | 229.35M | -6.74M | 11M | 18.59M | -286K |
| Free Cash Flow | -119.95M | -101.2M | -84.75M | -85.1M | -30.23M | -30.52M |
| FCF Margin % | -143.28% | -169.19% | -304.7% | -1115.37% | - | - |
| FCF Growth % | -54.96% | -19.41% | 0.42% | -181.51% | 0.96% | - |
| FCF per Share | -2.27 | -2.04 | -1.71 | -1.72 | -0.61 | -0.62 |
| FCF Conversion (FCF/Net Income) | 0.83x | 0.68x | 0.77x | 0.83x | 0.88x | 1.03x |
| Interest Paid | -3.6M | 0 | 3.63M | 0 | 0 | 0 |
| Taxes Paid | -38K | 0 | 43K | 12K | 214K | 70K |
Unsustainable Operating Cash Burn
According to recent financial disclosures, the OCF/NI ratio for KMTS fluctuated significantly, reaching 0.54 in 2026Q3, which highlights a persistent disconnect between accounting losses and the actual cash consumed by the company's aggressive commercial scaling efforts in the competitive wearable cardiac device market.
The gap between net income and operating cash flow suggests that non-cash charges, particularly stock-based compensation, are masking the true extent of the company's cash-based operational deficit. Investors should monitor whether this conversion ratio stabilizes as the company attempts to achieve operational leverage, as current figures indicate that accounting losses are not fully capturing the cash-burn reality.
As reported in quarterly statements, KMTS continues to experience deep negative free cash flow, with a 2026Q3 FCF margin of -114.7%, underscoring the heavy capital requirements necessary to maintain its current growth trajectory while competing against established incumbents in the cardiac rhythm management space.
The consistent negative FCF trajectory suggests that the company's current business model is not yet self-funding, necessitating ongoing reliance on external capital. This trend warrants further investigation into whether the company can reach a cash-flow-positive state before its existing liquidity reserves are exhausted.
Based on reported figures, KMTS maintains a high capital intensity, with CapEx/Revenue reaching 39.9% in 2026Q3, reflecting the substantial investment required to deploy and maintain the ASSURE cardiac recovery system units within hospital networks across the United States.
The elevated level of capital expenditure relative to revenue suggests that the company is in a heavy asset-deployment phase, which may be necessary to capture market share but places significant pressure on liquidity. Analysts should evaluate whether these expenditures represent growth-oriented investments or if they are merely maintenance costs for a rapidly depreciating fleet of field equipment.
Data from recent filings indicates that working capital changes have been inconsistent, swinging from a $6.0M outflow in 2026Q1 to a $5.3M inflow in 2026Q3, which may suggest challenges in managing collections or inventory levels during this period of rapid commercial expansion.
The volatility in working capital suggests that the company's cash conversion cycle is not yet optimized, potentially due to the complexities of third-party payer reimbursement and the scaling of its service-based revenue model. Investors should monitor these fluctuations as they may indicate underlying friction in the company's ability to convert billings into realized cash.
Quick answers to the most common questions about buying KMTS stock.
KESTRA MEDICAL TECHNOLOGIES, LTD. (KMTS) generated $-77.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
KESTRA MEDICAL TECHNOLOGIES, LTD. (KMTS) reported negative free cash flow of $101.2M in 2025, indicating capital requirements exceeded cash from operations.
KESTRA MEDICAL TECHNOLOGIES, LTD. (KMTS) spent $23.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, KESTRA MEDICAL TECHNOLOGIES, LTD. (KMTS) returned $1.7M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.