Cash conversion remains highly volatile, evidenced by an operating cash flow to net income ratio that fluctuated from 0.13 in 2025Q3 to 2.64 in 2023Q4.
| Cash from Operations | 33.28M | 33.81M | 47.98M | 53.38M | 29.47M | 8.68M | 14.55M | -32K | 2.72M | 1M |
| Operating CF Margin % | - | 7.23% | 11.35% | 13.16% | 6.97% | 2.38% | 4.92% | -0.01% | 1.55% | 0.72% |
| Operating CF Growth % | -44.54% | -29.53% | -10.11% | 81.11% | 239.6% | -40.34% | 45559.38% | -101.18% | 171.16% | - |
| Net Income | 31.81M | 0 | 30.82M | 32.47M | 25.84M | 22.44M | 16.67M | 1.72M | -124K | 4.55M |
| Depreciation & Amortization | 31.43M | 0 | 18.3M | 15.75M | 14.23M | 10.04M | 8.57M | 5.96M | 3.96M | 3.12M |
| Stock-Based Compensation | 1.83M | 0 | 2.06M | 770K | 2.05M | 2.03M | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | -3.77M | -959K | -478K | -483K | 3.94M | 0 | 1.66M | 0 |
| Other Non-Cash Items | -17.38M | 57.94M | 4.65M | 7.1M | 2.8M | -5M | 2.03M | 3.86M | 191K | 305K |
| Working Capital Changes | -32.41M | -24.12M | -4.08M | -1.75M | -14.96M | -20.34M | -16.66M | -11.57M | -2.97M | -6.97M |
| Change in Receivables | -27.03M | -9.83M | 559K | 2.86M | 1.85M | -8.94M | -3.7M | -6.34M | -3.51M | -1.35M |
| Change in Inventory | -31.05M | -11.95M | -942K | -3.82M | -16.21M | -10.85M | -13.83M | -5.95M | -985K | -7.79M |
| Change in Payables | 33.32M | 9.33M | -260K | 1.06M | 89K | -1.6M | 1M | 0 | 3.28M | 1.72M |
| Cash from Investing | 14.81M | 24.14M | -5.86M | -30.17M | -17.84M | -13.28M | -37.35M | -24.76M | -24.31M | -6.35M |
| Capital Expenditures | -4.66M | -4.5M | -4.07M | -9.33M | -14.75M | -12.38M | -36.48M | -34.81M | -31.91M | -5.51M |
| CapEx % of Revenue | 0.97% | 0.96% | 0.96% | 2.3% | 3.49% | 3.4% | 12.35% | 15.48% | 18.19% | 3.93% |
| Acquisitions | 618K | 253K | 0 | 0 | -4M | -900K | -893K | 0 | 7.51M | -1.25M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 22.89M | 0 | 134K | 1.34M | 5.95M | 0 | 24K | 10.05M | 90K | 409K |
| Cash from Financing | -51.89M | -51.66M | -33.62M | -16.17M | -2.07M | 10.64M | 22.45M | 24.63M | 21.76M | 5.96M |
| Debt Issued (Net) | -13.91M | -12.86M | -1.12M | 6.99M | 5.91M | -57.85M | 23.3M | 24.74M | 19.3M | 7.29M |
| Equity Issued (Net) | -2.97M | -2.7M | 725K | 123K | 51K | 67.69M | -248K | 0 | 1.9M | 0 |
| Dividends Paid | -36.07M | -36.1M | -31.02M | -23.2M | -6.96M | 0 | -606K | 0 | -1.25M | -700K |
| Share Repurchases | -3M | -3M | 0 | 0 | 0 | 0 | -248K | 0 | 0 | 0 |
| Other Financing | 1.06M | 0 | -2.21M | -79K | -1.06M | 794K | 0 | -119K | 1.81M | -626K |
| Net Change in Cash | -3.79M | 6.3M | 8.51M | 7.04M | 9.56M | 6.04M | -354K | -163K | 174K | 610K |
| Free Cash Flow | 28.62M | 29.31M | 43.91M | 44.05M | 14.73M | -3.7M | -21.93M | -34.84M | -29.19M | -4.51M |
| FCF Margin % | 5.95% | 6.27% | 10.39% | 10.86% | 3.48% | -1.02% | -7.42% | -15.49% | -16.64% | -3.22% |
| FCF Growth % | -40.65% | -33.26% | -0.31% | 199.1% | 497.81% | 83.12% | 37.05% | -19.36% | -547.54% | - |
| FCF per Share | 1.43 | 1.45 | 2.18 | 2.20 | 0.74 | -0.19 | -1.42 | -2.29 | -1.53 | -0.31 |
| FCF Conversion (FCF/Net Income) | 0.90x | 1.07x | 1.60x | 1.64x | 1.25x | 0.42x | 0.83x | -0.02x | 129.38x | 0.22x |
| Interest Paid | 998K | 1.91M | 2.03M | 2M | 1.98M | 2.9M | 3.89M | 3.32M | 1.5M | 1.27M |
| Taxes Paid | 0 | 9.14M | 10.97M | 11.77M | 8.3M | 4.84M | 2.5M | 0 | 530K | 97K |
Working Capital Volatility
According to reported financial data, KRT's operating cash flow to net income ratio has exhibited extreme volatility, ranging from a low of 0.13 in 2025Q3 to a high of 2.64 in 2023Q4, suggesting that reported net income is an unreliable proxy for actual cash generation.
The significant divergence between net income and operating cash flow indicates that non-cash items and accruals are heavily influencing the bottom line. Investors should monitor whether this inconsistency stems from aggressive revenue recognition or timing differences in inventory procurement, as the current conversion profile appears unstable.
As reported in financial statements, KRT's free cash flow margins have fluctuated wildly, peaking at 19.4% in 2024Q3 before dipping into negative territory at -1.2% in 2025Q3, highlighting a lack of consistent cash flow generation despite ongoing top-line revenue growth.
The erratic nature of free cash flow suggests that the company's operational model is highly sensitive to external variables that disrupt cash conversion. This trajectory warrants further investigation into whether the recent expansion of distribution hubs is creating a permanent drag on cash flow or if this is merely a temporary phase of capital intensity.
Based on KRT's reported figures, working capital changes have frequently acted as a significant drain on cash, with a notable $16.1M outflow in 2025Q4, indicating that the company's inventory and receivables management may be struggling to keep pace with its operational expansion.
The recurring negative impact of working capital on cash flow suggests that the company is tying up substantial liquidity in its supply chain. This trend may indicate that the firm is forced to carry higher inventory levels to support its proprietary logistics network, which could limit its financial flexibility during periods of demand contraction.
As evidenced by recent filings, KRT has maintained a consistent dividend payout of $9.0M per quarter throughout 2025, which appears aggressive relative to the company's volatile free cash flow, potentially straining the balance sheet if cash generation does not stabilize in the near term.
The commitment to a fixed dividend payout despite significant quarterly swings in cash flow suggests a management preference for shareholder returns that may not be fully supported by current operational realities. Investors should monitor whether this dividend policy remains sustainable if the company continues to prioritize capital-intensive warehouse expansion.
Quick answers to the most common questions about buying KRT stock.
Karat Packaging Inc. (KRT) generated $33.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Karat Packaging Inc. (KRT) generated $29.3M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Karat Packaging Inc. (KRT) spent $4.5M 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, Karat Packaging Inc. (KRT) returned $36.1M to shareholders via cash dividends and spent $3.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.