Kura Oncology, Inc. (KURA) Cash Flow Statement

The OCF/NI ratio oscillates wildly, from -1.45 in 2025Q4 to 1.17 in 2026Q1, indicating that net income is not a reliable proxy for cash generation. The positive OCF in 2025Q4 and 2024Q4 are anomalies attributable to large working capital inflows, likely from milestone payments or collaboration receipts, not operational profitability. Excluding these quarters, OCF consistently exceeds net losses, suggesting that non-cash charges like SBC and D&A are partially offsetting cash outflows, but the core burn remains substantial.

FCF margins are deeply negative, ranging from -3.0% to -197.8% in quarters with revenue, but the trend is clear: the company is burning cash at an increasing rate as R&D expenses escalate. The positive FCF quarters (2025Q4 and 2024Q4) are outliers driven by one-time working capital inflows, not sustainable operations. The trajectory suggests that without new capital, the company's cash position of $149M will be depleted within two quarters, based on the current burn rate.

The low capital intensity is consistent with a company that outsources manufacturing and relies on contract research organizations for trials. However, this also means that the primary cash drain is operating expenses, particularly R&D, which cannot be curtailed without jeopardizing clinical progress. The lack of meaningful CapEx suggests that future growth will be funded through working capital and equity raises rather than asset expansion.

The large positive working capital changes in 2025Q4 and 2024Q4 likely reflect upfront or milestone payments from partners, which are then consumed in subsequent quarters. The negative changes in other quarters suggest that the company is using cash to fund operations as receivables are collected or deferred revenue is recognized. This pattern underscores the non-recurring nature of revenue and the need for investors to focus on the underlying burn rate rather than quarterly cash flow swings.

The absence of capital returns is expected given the negative cash flow and the need to preserve liquidity for clinical trials. The company's capital deployment strategy appears focused on advancing ziftomenib through late-stage development, which requires significant R&D investment. However, the lack of buybacks or dividends also means that shareholders are entirely reliant on clinical success for returns, increasing the binary risk profile.

The gap between net income and operating cash flow is substantial, with OCF being less negative than net income in most quarters. This is primarily due to stock-based compensation (SBC) and depreciation, which are non-cash expenses, and favorable working capital changes from milestone payments. However, the cumulative cash burn of -$78M is still significant, and the company's cash position of $149M suggests that it has been able to fund operations through equity raises and partnership proceeds. The divergence highlights that reported losses overstate the cash drain, but the underlying burn remains a critical concern.