Operating cash flow conversion is robust at 2.10x net income in 2026Q2, with FCF margin at 18.8% and capex only 1.7% of revenue, but working capital outflows of -$13.6M and $1.1B in acquisitions signal ongoing cash deployment.
Loar Holdings Inc. (LOAR) cash flow statement — 4-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 |
|---|
| Cash from Operations | 121.32M | 112.28M | 54.97M | 12.81M | 13.27M |
| Operating CF Margin % | - | 22.62% | 13.65% | 4.04% | 5.54% |
| Operating CF Growth % | 167.9% | 104.25% | 329.03% | -3.44% | - |
| Net Income | 68M | 72.15M | 22.23M | -4.62M | -2.47M |
| Depreciation & Amortization | 64.74M | 51M | 43.07M | 38.02M | 33.96M |
| Stock-Based Compensation | 17.16M | 14.93M | 11.1M | 372K | 1.53M |
| Deferred Taxes | 3.75M | 3.68M | -1.55M | -3.76M | -3.74M |
| Other Non-Cash Items | 9.8M | 12.23M | 6.6M | 4.06M | 3.89M |
| Working Capital Changes | -42.13M | -41.71M | -26.48M | -21.27M | -19.9M |
| Change in Receivables | -22.74M | -16.61M | -2.1M | -13.73M | -8.53M |
| Change in Inventory | -12.96M | -9.56M | -12.05M | -11.17M | -6.19M |
| Change in Payables | 8.31M | 1.28M | -1.24M | 808K | 1.23M |
| Cash from Investing | -772.97M | -520.88M | -392.13M | -72.56M | -181.83M |
| Capital Expenditures | -15.28M | -13.02M | -8.87M | -12.13M | -7.93M |
| CapEx % of Revenue | 2.61% | 2.62% | 2.2% | 3.82% | 3.31% |
| Acquisitions | -757.7M | -507.85M | -383.26M | -60.42M | -173.9M |
| Investments | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 0 |
| Cash from Financing | 671.14M | 439.23M | 370.02M | 45.72M | 135.31M |
| Debt Issued (Net) | 682.82M | 1.33M | -258.07M | 46.78M | 136.92M |
| Equity Issued (Net) | 3.88M | 1.86M | 636.97M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -15.56M | 437.9M | -8.88M | -1.06M | -1.61M |
| Net Change in Cash | 19.09M | 30.76M | 32.58M | -14.01M | -33.1M |
| Free Cash Flow | 106.04M | 99.26M | 46.1M | 679K | 5.34M |
| FCF Margin % | 18.09% | 20% | 11.44% | 0.21% | 2.23% |
| FCF Growth % | 32.38% | 115.31% | 6689.4% | -87.28% | - |
| FCF per Share | 1.11 | 1.04 | 0.50 | 0.01 | 0.07 |
| FCF Conversion (FCF/Net Income) | 1.56x | 1.56x | 2.47x | -2.78x | -5.37x |
| Interest Paid | 44.25M | 13.06M | 52.05M | 64.21M | 39.6M |
| Taxes Paid | 9.46M | 7.06M | 12.57M | 5.04M | 2.58M |
Quick answers to the most common questions about buying LOAR stock.
Loar Holdings Inc. (LOAR) generated $112.3M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Loar Holdings Inc. (LOAR) generated $99.3M 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.
Loar Holdings Inc. (LOAR) spent $13.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
EPS miss vs raised guidance
Metrics are mathematically derived from official filings.
Cash Conversion Outpaces Reported Earnings
LOAR's operating cash flow consistently exceeds net income, with OCF/NI reaching 2.10x in 2026Q2, indicating strong earnings quality despite non-cash charges, as per quarterly financial data.
The persistent gap between operating cash flow and net income, averaging well above 1.5x over the last eight quarters, suggests that reported earnings understate cash generation, likely due to significant D&A and SBC add-backs. However, the 2026Q2 EPS miss versus consensus, despite robust cash conversion, may indicate that accrual-based earnings are being impacted by factors not fully reflected in cash flows, warranting close monitoring of working capital changes and expense timing.
Free Cash Flow Margin Expansion Signals Efficiency
FCF margin improved to 18.8% in 2026Q2 from 5.2% in 2024Q2, reflecting operational leverage and disciplined capex, as reported in quarterly cash flow statements.
The upward trajectory in FCF margin, from single digits in early 2024 to consistently above 14% in recent quarters, indicates that revenue growth is translating into cash generation more efficiently. This improvement, coupled with a 23.2% YoY revenue growth, suggests that the company is scaling without proportionate increases in capital intensity, though the sustainability of this trend depends on maintaining integration discipline amid rapid acquisitions.
Low Capital Intensity Supports Cash Generation
CapEx remains modest at 1.7% of revenue in 2026Q2, well below peers, indicating a light-asset model that preserves cash for acquisitions, per recent financial disclosures.
LOAR's capital expenditure intensity is significantly lower than typical aerospace manufacturers, reflecting its focus on niche components and aftermarket sales that require limited fixed asset investment. This low capex requirement enhances free cash flow conversion and provides flexibility for its acquisition-led growth strategy, but investors should monitor whether deferred maintenance or capacity constraints emerge as the installed base expands.
Working Capital Drag Reflects Growth Investment
Working capital changes consistently consume cash, with a -$13.6M outflow in 2026Q2, suggesting inventory build-up and receivables growth tied to rapid expansion, as per quarterly data.
The persistent negative working capital changes, averaging around -$9M per quarter, indicate that LOAR is investing in inventory and receivables to support its 39.4% YoY revenue growth. While this is typical for a growing industrial, the magnitude of the drag relative to operating cash flow (about 39% in 2026Q2) suggests that cash conversion could be temporarily suppressed if collections slow or inventory becomes obsolete, particularly given the risk of platform retirements.
Acquisitions Drive Cash Deployment, No Returns Yet
LOAR has deployed over $1.1B in acquisitions since 2024Q1, with no dividends or buybacks, reflecting a pure roll-up strategy, as reported in cash flow statements.
The cash flow statement reveals a singular focus on inorganic growth, with acquisition outflows dominating capital deployment and no shareholder returns. This strategy aligns with the 'buy-and-build' model, but the large outflows (e.g., -$475M in 2025Q4) and the recent EPS miss suggest that integration costs and purchase accounting may be pressuring near-term earnings, making the return on invested capital a key metric to watch.
Cumulative Cash Earnings Exceed Net Income
Over the last ten quarters, cumulative operating cash flow of $228.4M surpasses net income of $122.1M, indicating strong cash generation relative to accrual earnings, per financial statements.
The cumulative gap of $106.3M between operating cash flow and net income highlights the significant non-cash charges, primarily D&A and SBC, that depress reported earnings. This divergence suggests that LOAR's true economic earnings power is higher than GAAP net income, but it also raises questions about the sustainability of these add-backs as the company matures and acquisition-related amortization eventually declines.
What Could Invalidate the Base Case
The 2026Q2 EPS miss of $0.18 versus $0.33 consensus, despite robust cash flow, may signal that accrual adjustments or integration costs are eroding earnings quality, per reported figures.
While operating cash flow remains strong, the significant divergence between cash generation and reported EPS in 2026Q2 suggests that non-cash charges or working capital timing may be masking underlying margin pressure. Investors should monitor whether the gap between OCF and net income narrows as acquisition-related amortization and SBC normalize, and whether the raised guidance is supported by cash conversion in upcoming quarters.