Marriott International, Inc. (MAR) Cash Flow Statement

The wide quarterly swings in OCF/NI, from 0.70 in 2024Q4 to 1.86 in 2025Q4, suggest that reported net income is not consistently backed by operating cash flow, likely due to the timing of incentive fee recognition and working capital fluctuations. The 2026Q2 ratio of 1.24 is closer to the historical average, but the volatility warrants monitoring to distinguish between seasonal patterns and structural changes in earnings quality.

The negative FCF in 2024Q4 was an anomaly driven by elevated capex of $342M and weak operating cash flow of $318M, but subsequent quarters show a clear recovery, with FCF margins averaging around 10-11% in 2026. This suggests that the asset-light model generates consistent free cash flow, though the quarterly volatility indicates that investors should focus on trailing twelve-month figures rather than single-quarter snapshots.

The only outlier is 2024Q4's 5.3% CapEx/Revenue, which appears to be a one-time spike, as subsequent quarters reverted to the 2% range. This low and stable capital intensity supports the view that Marriott does not need heavy reinvestment to maintain its fee-based revenue streams, freeing up cash for shareholder returns.

The negative working capital changes in Q1 quarters (2026Q1: -$363M, 2025Q1: -$325M) suggest cash outflows for incentive fee payouts or seasonal bonus accruals, while Q4 quarters show positive inflows. This pattern is consistent with the back-weighted nature of incentive fee recognition, and investors should expect continued quarterly noise in operating cash flow.

Over the last ten quarters, buybacks have consistently exceeded FCF, with cumulative buybacks of approximately $8.8B versus cumulative FCF of $6.2B. This suggests that Marriott is funding a portion of its buybacks through debt or existing cash reserves, which is sustainable only if operating cash flow remains robust. The low cash balance of $358M highlights the reliance on credit markets to maintain this pace.

The cumulative OCF/NI ratio of approximately 1.22 suggests that Marriott's earnings quality is solid, with non-cash charges like D&A and SBC adding back more than working capital outflows. This divergence is a positive signal, but the quarterly volatility in OCF/NI (ranging from 0.70 to 1.86) implies that the conversion is not uniform, and investors should monitor for any deterioration in working capital efficiency.