Cash conversion efficiency is highly unstable, evidenced by an operating cash flow to net income ratio of just 0.15 in 2026Q1 and a $1.4 billion working capital outflow in the same period.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 7.37B | 8.56B | 6.97B | 7.92B | 7.8B | 9.22B | 8.18B | 7.31B | 3.14B | 6.48B | 5.19B | 5.1B | 3.87B | 4.55B | 1.56B | 4.25B | 3.55B | 3.17B | 4.42B | 4.24B | 3.78B | 3.19B | 2.92B | 1.81B | 2.29B | 1.82B | 2.02B | 1.08B | 2.03B | 1.21B | 1.64B |
| Operating CF Margin % | - | 11.4% | 9.81% | 11.72% | 11.82% | 13.75% | 12.51% | 12.22% | 5.84% | 12.96% | 10.97% | 12.58% | 9.68% | 10.02% | 3.31% | 9.15% | 7.74% | 7.02% | 10.35% | 10.13% | 9.55% | 8.58% | 8.23% | 5.68% | 8.61% | 7.61% | 7.96% | 4.22% | 7.73% | 4.3% | 6.09% |
| Operating CF Growth % | 93.9% | 22.73% | -11.97% | 1.51% | -15.39% | 12.68% | 11.93% | 132.98% | -51.54% | 24.8% | 1.73% | 31.95% | -14.96% | 191.22% | -63.3% | 19.9% | 11.79% | -28.23% | 4.24% | 12.11% | 18.44% | 9.23% | 61.64% | -20.94% | 25.37% | -9.47% | 87.19% | -46.97% | 68.13% | -26.16% | 26.63% |
| Net Income | 4.79B | 5.02B | 5.34B | 6.92B | 5.73B | 6.32B | 6.83B | 6.23B | 5.05B | 2B | 5.3B | 3.6B | 3.61B | 2.98B | 2.75B | -81M | 2.93B | 3.02B | 3.22B | 3.03B | 2.53B | 1.82B | 1.27B | 1.05B | 533M | 79M | -424M | 382M | 1B | 1.3B | 1.35B |
| Depreciation & Amortization | 1.69B | 1.69B | 1.56B | 1.43B | 1.4B | 1.36B | 1.29B | 1.19B | 1.16B | 1.2B | 1.22B | 1.03B | 994M | 990M | 988M | 797M | 749M | 859M | 845M | 819M | 764M | 705M | 656M | 609M | 558M | 823M | 968M | 969M | 1B | 1.05B | 1.2B |
| Stock-Based Compensation | 327M | 304M | 277M | 265M | 238M | 227M | 221M | 189M | 173M | 158M | 149M | 138M | 164M | 189M | 167M | 141M | 168M | 154M | 155M | 149M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 567M | 372M | -588M | -498M | -757M | -183M | 60M | 222M | -244M | 3.3B | -152M | -445M | -401M | -5M | 930M | -2M | 576M | 542M | 72M | 110M | 75M | 24M | -58M | 467M | -463M | -118M | -84M | 293M | 203M | 155M | -251M |
| Other Non-Cash Items | 135M | 2.16B | 2.05B | -3M | 1.77B | 1.44B | 894M | 223M | 900M | 14M | -1.46B | 603M | 396M | 500M | 210M | 2.81B | -953M | -2.04B | 476M | -124M | 159M | 534M | 631M | 3M | 1.09B | 898M | 347M | 737M | 0 | -379M | 738M |
| Working Capital Changes | -142M | -983M | -1.66B | -194M | -585M | 54M | -1.11B | -742M | -3.9B | -197M | 132M | 174M | -901M | -109M | -3.48B | 585M | 81M | 639M | -344M | 254M | 256M | 106M | 429M | -323M | 566M | 143M | 1.21B | -922M | -178M | -920M | -48M |
| Change in Receivables | 3.86B | -1.83B | -328M | 373M | -542M | 15M | 359M | 107M | -179M | -401M | -811M | -256M | 28M | 767M | -460M | 443M | -15M | -719M | -333M | -324M | 94M | -390M | -87M | -258M | 394M | 0 | 0 | 130M | 809M | -572M | -328M |
| Change in Inventory | -888M | -286M | -478M | -44M | -107M | 564M | 74M | -622M | -119M | 183M | -46M | -398M | 77M | -60M | -422M | -74M | -227M | -270M | -183M | -57M | -530M | -39M | 519M | -94M | 585M | 651M | -187M | -404M | -1.18B | -687M | -125M |
| Change in Payables | 883M | 1.34B | -93M | 151M | 1.27B | -98M | -372M | -1.1B | 914M | -189M | -188M | -160M | 95M | -647M | -236M | 609M | -362M | -26M | -141M | -66M | 217M | 239M | 288M | 330M | -317M | 0 | 0 | 29M | 518M | 488M | 544M |
| Cash from Investing | -2.09B | -1.98B | -1.79B | -1.69B | -1.79B | -1.16B | -2.01B | -1.24B | -1.07B | -1.15B | -985M | -9.73B | -1.72B | -1.12B | -1.22B | -813M | -319M | -1.52B | -907M | -1.21B | -1.66B | -499M | -708M | -1.46B | -539M | 139M | 1.76B | -1.64B | -455M | 185M | -8.03B |
| Capital Expenditures | -1.71B | -1.65B | -1.69B | -1.69B | -1.67B | -1.52B | -1.77B | -1.48B | -1.28B | -1.18B | -1.06B | -939M | -845M | -836M | -942M | -987M | -820M | -852M | -926M | -940M | -893M | -865M | -769M | -687M | -662M | -619M | -500M | -669M | -697M | -750M | -737M |
| CapEx % of Revenue | 2.27% | 2.2% | 2.37% | 2.5% | 2.53% | 2.27% | 2.7% | 2.48% | 2.38% | 2.36% | 2.25% | 2.32% | 2.12% | 1.84% | 2% | 2.12% | 1.79% | 1.89% | 2.17% | 2.25% | 2.25% | 2.32% | 2.16% | 2.16% | 2.49% | 2.58% | 1.97% | 2.62% | 2.65% | 2.67% | 2.74% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | -282M | 0 | 0 | 0 | 0 | -9B | -898M | -269M | -304M | -649M | -148M | -435M | -233M | -311M | -942M | 371M | 188M | -587M | 30M | 825M | 0 | 160M | 134M | 890M | -35M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -382M | -328M | -107M | -3M | -119M | 361M | 38M | 243M | 203M | 30M | 78M | 208M | 20M | -16M | 24M | 823M | 820M | 48M | -20M | -2M | 132M | 28M | 29M | 53M | 93M | 125M | 2.26B | -1.13B | 108M | 45M | -7.26B |
| Cash from Financing | -5.19B | -4.94B | -4.14B | -7.33B | -7.07B | -7.62B | -4.53B | -5.33B | -4.15B | -4.3B | -3.46B | 4.28B | -3.31B | -2.71B | -2.07B | -2.12B | -3.36B | -1.48B | -3.94B | -2.3B | -2.46B | -1.51B | -2.17B | -2.08B | 77M | -2.56B | -2.73B | 731M | -1.29B | -1.39B | 5.74B |
| Debt Issued (Net) | -1B | 1.34B | 2.8B | 1.86B | 3.96B | -500M | -519M | -1.5B | -150M | 0 | -952M | 9.1B | 0 | -150M | 0 | 1.35B | 0 | 1.22B | -612M | -32M | -210M | -133M | -1.25B | -1.38B | -110M | -2.58B | -2.56B | 1.06B | -1.02B | 420M | 6B |
| Equity Issued (Net) | -2.25B | -3B | -3.7B | -6B | -7.9B | -4.09B | -1.1B | -1.2B | -1.49B | -2B | -2.1B | -3.07B | -1.9B | -1.76B | -550M | -2.46B | -2.42B | -1.85B | -2.93B | -1.78B | -1.36B | -904M | -509M | -438M | 386M | 213M | 14M | 17M | 40M | -1.46B | 97M |
| Dividends Paid | -3.15B | -3.13B | -3.06B | -3.06B | -3.02B | -2.94B | -2.76B | -2.56B | -2.35B | -2.16B | -2.05B | -1.93B | -1.76B | -1.54B | -1.35B | -1.09B | -969M | -908M | -737M | -615M | -538M | -462M | -405M | -261M | -199M | -192M | -183M | -345M | -310M | -352M | -362M |
| Share Repurchases | -2.25B | -3B | -3.7B | -6B | -7.9B | -4.09B | -1.1B | -1.2B | -1.49B | -2B | -2.1B | -3.07B | -1.9B | -1.76B | -990M | -2.46B | -2.42B | -1.85B | -2.93B | -2.13B | -2.12B | -1.31B | -673M | -482M | -50M | 0 | 0 | 0 | -51M | -1.57B | 0 |
| Other Financing | 1.21B | -154M | -182M | -135M | -115M | -89M | -144M | -72M | -163M | -141M | 1.64B | 179M | 346M | 746M | -166M | 93M | 26M | 61M | 342M | 124M | -353M | -12M | 0 | 0 | -2.63B | 0 | 0 | 0 | 0 | 0 | 0 |
| Net Change in Cash | 91M | 1.64B | 1.04B | -1.1B | -1.06B | 444M | 1.65B | 742M | -2.09B | 1.02B | 747M | -356M | -1.17B | 719M | -1.68B | 1.32B | -130M | 223M | -480M | 736M | -332M | 1.18B | 50M | -1.73B | 1.83B | -593M | 1.05B | 170M | -1.29B | 0 | 5.74B |
| Free Cash Flow | 5.66B | 6.91B | 5.29B | 6.23B | 6.13B | 7.7B | 6.42B | 5.83B | 1.86B | 5.3B | 4.13B | 4.16B | 3.02B | 3.71B | 619M | 3.27B | 2.73B | 2.32B | 3.5B | 3.3B | 2.89B | 2.33B | 2.15B | 1.12B | 1.63B | 1.21B | 1.52B | 408M | 1.33B | 458M | 899M |
| FCF Margin % | 7.54% | 9.2% | 7.44% | 9.22% | 9.29% | 11.48% | 9.81% | 9.74% | 3.46% | 10.61% | 8.72% | 10.27% | 7.56% | 8.18% | 1.31% | 7.02% | 5.95% | 5.14% | 8.18% | 7.89% | 7.29% | 6.26% | 6.07% | 3.53% | 6.12% | 5.03% | 5.99% | 1.6% | 5.08% | 1.63% | 3.35% |
| FCF Growth % | 13.58% | 30.66% | -15.12% | 1.58% | -20.35% | 19.98% | 10.13% | 213.28% | -64.9% | 28.43% | -0.86% | 37.77% | -18.57% | 499.35% | -81.05% | 19.77% | 17.49% | -33.59% | 5.88% | 14.22% | 24.09% | 8.07% | 92.07% | -31% | 34.83% | -20.45% | 271.57% | -69.42% | 191.27% | -49.05% | 18.13% |
| FCF per Share | 24.50 | 29.79 | 22.10 | 24.80 | 23.17 | 27.75 | 22.82 | 20.53 | 6.49 | 18.23 | 13.61 | 13.23 | 9.37 | 11.36 | 1.88 | 9.61 | 7.40 | 5.97 | 8.54 | 7.73 | 6.62 | 5.23 | 4.82 | 2.49 | 3.60 | 2.79 | 3.77 | 1.06 | 3.50 | 1.24 | 2.03 |
| FCF Conversion (FCF/Net Income) | 1.18x | 1.71x | 1.31x | 1.14x | 1.36x | 1.46x | 1.20x | 1.17x | 0.62x | 3.23x | 0.98x | 1.41x | 1.07x | 1.52x | 0.57x | 1.60x | 1.21x | 1.05x | 1.37x | 1.40x | 1.50x | 1.75x | 2.31x | 1.72x | 4.58x | -1.74x | -3.88x | 2.82x | 2.03x | 0.93x | 1.21x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working Capital Volatility
As reported in recent quarterly filings, LMT's operating cash flow to net income ratio has fluctuated wildly, reaching a low of 0.15 in 2026Q1, which suggests that reported earnings are frequently decoupled from the actual cash generation capabilities of the underlying defense programs.
The significant variance in the OCF/NI ratio indicates that accounting accruals and timing differences in contract milestones are heavily distorting the perceived quality of earnings. Investors should monitor whether this divergence reflects genuine operational friction or merely the lumpy nature of government payment cycles.
Based on the provided financial data, LMT's free cash flow margins have shown extreme volatility, swinging from a negative 1.6% in 2026Q1 to a peak of 18.0% in 2025Q3, highlighting a lack of consistent cash conversion efficiency across the company's primary defense segments.
This erratic trajectory suggests that the company's ability to generate surplus cash is highly sensitive to program-specific delivery delays and working capital swings. The inability to maintain a stable FCF margin profile may complicate long-term capital allocation planning and dividend sustainability.
According to the cash flow statements, working capital changes have been a major source of volatility, with a massive $1.4 billion outflow in 2026Q1 following a $2.5 billion inflow in 2025Q3, indicating significant instability in the company's cash conversion cycle.
These dramatic shifts in working capital suggest that Lockheed Martin is struggling to manage the timing of inventory build-ups and customer collections effectively. Such fluctuations may indicate that the company is absorbing the brunt of supply chain bottlenecks, which directly impacts its short-term liquidity position.
As reported in recent filings, LMT has consistently prioritized shareholder returns, with dividend payments and share repurchases often exceeding free cash flow, as evidenced by the $816 million dividend payout in 2026Q1 despite negative free cash flow of $291 million.
This pattern of returning capital while cash flow is negative suggests that the company is relying on its balance sheet or debt capacity to fund shareholder distributions. This strategy warrants further investigation, as it may limit the company's financial flexibility during periods of operational stress.
Quick answers to the most common questions about buying LMT stock.
Lockheed Martin Corporation (LMT) generated $8.56B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Lockheed Martin Corporation (LMT) generated $6.91B 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.
Lockheed Martin Corporation (LMT) spent $1.65B 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, Lockheed Martin Corporation (LMT) returned $3.13B to shareholders via cash dividends and spent $3.00B on share repurchases. This shows the company's commitment to returning capital to its equity investors.