Cash conversion remains a primary concern, as evidenced by a 2026Q1 OCF/NI ratio of 0.03 and a $22.8 million drain from working capital requirements during the same period.
| Cash from Operations | -8.33M | -22.12M | 26.65M | 20.33M | -5.89M |
| Operating CF Margin % | - | -4.69% | 7.72% | 7.24% | -2.6% |
| Operating CF Growth % | 18.03% | -183.01% | 31.09% | 444.94% | - |
| Net Income | 29.96M | 17.37M | 12.7M | 4.36M | -14.1M |
| Depreciation & Amortization | 49.91M | 42.74M | 32.8M | 27.18M | 34.98M |
| Stock-Based Compensation | 0 | 1.41M | 993.14K | 1.29M | 1.6M |
| Deferred Taxes | 9.44M | 10.52M | -11.51M | -10.71M | -9.81M |
| Other Non-Cash Items | -3.36M | -863K | 1.62M | 2.77M | 2.77M |
| Working Capital Changes | -94.28M | -93.28M | -9.96M | -4.57M | -21.35M |
| Change in Receivables | -76.16M | -67.43M | -20.35M | -30.87M | -34.83M |
| Change in Inventory | -927K | 2.86M | -43.81K | 7.57M | 2.17M |
| Change in Payables | 1.07M | -16.88M | 31.78M | 0 | 0 |
| Cash from Investing | -444.75M | -238.27M | -46.24M | -16.21M | -21.26M |
| Capital Expenditures | -22.67M | -20.34M | -15.25M | -16.78M | -21.27M |
| CapEx % of Revenue | 4.34% | 4.31% | 4.42% | 5.98% | 9.4% |
| Acquisitions | -422.08M | -211.94M | -31.29M | 0 | 0 |
| Investments | - | - | - | - | - |
| Other Investing | -6M | 0 | 306.04K | 0 | 0 |
| Cash from Financing | 413.2M | 282.82M | 25.67M | -5.29M | 16.73M |
| Debt Issued (Net) | 285.66M | 126.51M | 27.58M | 1.75M | -14.93M |
| Equity Issued (Net) | 1.03M | 154.84M | -155.91K | -788.59K | 31.66M |
| Dividends Paid | 0 | 0 | -155.91K | -788.59K | -109.35K |
| Share Repurchases | 0 | 0 | -155.91K | -788.59K | -109.35K |
| Other Financing | 126.51M | 1.48M | -1.61M | -5.46M | 109.35K |
| Net Change in Cash | -39.88M | 22.43M | 6.08M | -1.17M | -10.42M |
| Free Cash Flow | -31M | -42.45M | 11.39M | 3.55M | -27.16M |
| FCF Margin % | -5.93% | -9% | 3.3% | 1.27% | -12% |
| FCF Growth % | -268.8% | -472.62% | 220.84% | 113.07% | - |
| FCF per Share | -0.23 | -0.32 | 0.09 | 0.03 | -0.21 |
| FCF Conversion (FCF/Net Income) | -1.03x | -1.27x | 2.10x | 4.66x | 0.42x |
| Interest Paid | 33.78M | 0 | 47.87M | 45.9M | 35.62M |
| Taxes Paid | 13.26M | 0 | 0 | 3.1M | 4.94M |
High Working Capital Intensity
According to recent financial disclosures, KRMN's operating cash flow frequently decouples from net income, as evidenced by the 2026Q1 OCF/NI ratio of 0.03, which suggests that reported earnings are not currently translating into meaningful cash generation due to significant non-cash charges and aggressive working capital requirements.
The persistent gap between net income and operating cash flow indicates that the company's accounting earnings may be heavily influenced by non-cash items such as amortization from its roll-up history. Investors should monitor whether this divergence is a temporary byproduct of rapid scaling or a structural issue where earnings quality remains permanently suppressed by high accruals.
As reported in quarterly filings, KRMN's free cash flow trajectory remains highly volatile, with margins swinging from -18.6% in 2025Q1 to 3.0% in 2025Q4, highlighting the difficulty of maintaining positive cash flow while simultaneously funding the aggressive expansion of its hypersonic and space-related production capabilities.
The inability to sustain positive free cash flow suggests that the company's growth is currently capital-intensive and reliant on external funding or parent-level support. This trajectory warrants investigation into whether the company can achieve self-sustaining cash flow as its major programs transition from development to full-rate production.
Based on the provided cash flow statements, KRMN has experienced significant cash outflows related to working capital, including a $22.8 million drain in 2026Q1, which suggests that the company is struggling to manage its cash conversion cycle effectively during this period of rapid top-line growth.
The consistent negative working capital changes indicate that the company is likely building inventory or facing extended collection cycles on large-scale government contracts. This trend implies that liquidity may remain tight, potentially forcing the company to rely on the parent entity for working capital support until program milestones are met.
As indicated by historical cash flow data, KRMN has prioritized inorganic growth, with significant cash outflows for acquisitions such as the $210.2 million spent in 2026Q1, which appears to be the primary driver of the company's current scale rather than organic reinvestment of internally generated cash.
The heavy reliance on acquisitions to drive growth suggests that the company's capital allocation is focused on building a broader platform of specialized capabilities. Investors should monitor whether this strategy will eventually pivot toward organic margin expansion or if the company will remain dependent on continuous capital deployment to maintain its competitive position.
Quick answers to the most common questions about buying KRMN stock.
Karman Holdings Inc. (KRMN) generated $-22.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Karman Holdings Inc. (KRMN) reported negative free cash flow of $42.5M in 2025, indicating capital requirements exceeded cash from operations.
Karman Holdings Inc. (KRMN) spent $20.3M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.