Mirion Technologies, Inc. (MIR) Cash Flow Statement

The OCF/NI ratio of 7.6x in Q2 2026, while extreme, reflects the heavy D&A burden (over $38M quarterly) that suppresses net income but not cash flow. Over the trailing year, cumulative OCF of $221M versus cumulative net income of $33M suggests earnings quality is high, with cash conversion driven by non-cash charges rather than aggressive accruals. Investors should monitor whether this gap narrows as acquisition-related amortization eventually rolls off.

The sequential improvement from $1.0M FCF in Q2 2025 to $48.1M in Q2 2026 is notable, with FCF margin expanding from 0.4% to 18.0%. This aligns with management's commentary on increased adjusted free cash flow, though the quarterly volatility (e.g., 3.6% in Q1 2026) suggests working capital swings remain a factor. If the 18% margin is sustainable, it would represent a significant step-up from the 10% average of the prior four quarters, warranting confirmation in upcoming quarters.

The declining capex intensity, from 6.6% to 3.9% over two years, suggests Mirion is transitioning to a more service-oriented model, with lower maintenance capex requirements. This supports the view that the business is becoming more cash-generative per dollar of revenue, though investors should verify that this does not signal underinvestment in growth areas like SMR design-in capabilities. The absolute capex of ~$10M per quarter appears modest relative to the $266.8M quarterly revenue, implying a high return on incremental capital.

The wide quarterly swings in working capital, from -$27.2M to +$26.4M over the past year, indicate that cash flow timing is heavily influenced by project milestones and customer payment terms. The negative changes in several quarters (e.g., -$26.4M in Q2 2025) suggest cash outflows for inventory or receivables, while positive changes in Q4 2025 and Q2 2026 reflect collections. This volatility complicates quarterly cash flow comparisons, but the cumulative effect over the trailing year is modest, implying that working capital is not a structural drag.

After a period of negligible buybacks in 2024, the company has consistently repurchased shares in 2025 and 2026, with Q2 2026 seeing $20.9M. This contrasts with the $581.3M acquisition outflow in Q4 2025, which appears to be a one-time deal. The combination of positive FCF and reduced M&A suggests management is prioritizing returning capital to shareholders, though the sustainability of this pace depends on maintaining the improved cash flow trajectory.

The cumulative OCF of $320M against cumulative net income of $7.7M over the trailing ten quarters highlights a massive gap, driven by D&A and other non-cash items. This suggests that the company's true cash-generative ability is far stronger than GAAP net income implies, but it also raises questions about the sustainability of these non-cash charges. If the gap narrows as amortization declines, net income could catch up to cash flow, potentially improving reported profitability metrics like ROE.