Free cash flow remains volatile, swinging from a 1.7% margin in 2025Q3 to 17.9% in 2026Q1, largely driven by lumpy working capital requirements and acquisition-related outflows.
| Cash from Operations | 81.94M | 64.06M |
| Operating CF Margin % | - | 6.53% |
| Operating CF Growth % | 58.8% | - |
| Net Income | 53.72M | 53.83M |
| Depreciation & Amortization | 62.53M | 61.93M |
| Stock-Based Compensation | 14.2M | 0 |
| Deferred Taxes | -7.98M | -8.85M |
| Other Non-Cash Items | 11.25M | 32.28M |
| Working Capital Changes | -51.77M | -75.13M |
| Change in Receivables | -5.24M | -27.27M |
| Change in Inventory | -42.51M | -36.1M |
| Change in Payables | 17.06M | 3.71M |
| Cash from Investing | -78.39M | -74.32M |
| Capital Expenditures | -15.32M | -15.63M |
| CapEx % of Revenue | 1.52% | 1.59% |
| Acquisitions | -63.07M | -58.69M |
| Investments | - | - |
| Other Investing | 0 | 0 |
| Cash from Financing | 280.99M | 276.33M |
| Debt Issued (Net) | -266.67M | -287.63M |
| Equity Issued (Net) | 563.52M | 575.11M |
| Dividends Paid | 0 | 0 |
| Share Repurchases | -52.16M | -39.28M |
| Other Financing | -15.86M | -11.15M |
| Net Change in Cash | 282.75M | 266.88M |
| Free Cash Flow | 66.61M | 48.43M |
| FCF Margin % | 6.63% | 4.94% |
| FCF Growth % | - | - |
| FCF per Share | 1.62 | 1.32 |
| FCF Conversion (FCF/Net Income) | 1.24x | 1.19x |
| Interest Paid | 12.24M | 0 |
| Taxes Paid | 26.01M | 0 |
Inorganic growth integration volatility
As reported in recent quarterly filings, NOVTU's operating cash flow to net income ratio fluctuated significantly, reaching a high of 3.35 in 2025Q2, which suggests that GAAP net income frequently fails to capture the underlying cash-generating capacity of the firm's core industrial and medical operations.
The wide variance between net income and operating cash flow indicates that non-cash charges, particularly those related to acquisition accounting, are heavily distorting reported profitability. Investors should interpret this divergence as a signal that cash conversion is highly sensitive to the timing of integration-related expenses rather than purely operational performance.
Based on the provided financial data, free cash flow margins have shown extreme volatility, ranging from a low of 1.7% in 2025Q3 to 17.9% in 2026Q1, highlighting the company's susceptibility to lumpy working capital requirements and the irregular timing of cash-intensive acquisition integration activities.
The sharp recovery in FCF during 2026Q1 appears to be a reversal of previous working capital outflows rather than a permanent shift in margin structure. This trajectory suggests that while the business is capable of generating significant cash, its FCF profile remains tethered to the cyclicality of its OEM customer base.
According to the quarterly cash flow statements, working capital changes have been a major source of volatility, with a significant outflow of $33.4 million in 2025Q4, indicating that inventory management and collection cycles are currently exerting substantial pressure on the company's short-term liquidity position.
The erratic nature of these working capital movements suggests that the company may be carrying high inventory buffers to satisfy the stringent delivery requirements of its medical OEM partners. This strategy, while necessary for maintaining design wins, creates periodic cash flow troughs that warrant close monitoring by stakeholders.
Based on reported figures, NOVTU consistently utilizes its cash reserves for share repurchases and strategic acquisitions, with $18.6 million deployed toward buybacks in 2026Q1 alone, demonstrating a management preference for inorganic growth and capital return over maintaining a static cash balance.
The reliance on share repurchases alongside acquisition activity suggests that management is confident in the long-term value of its platform, yet this strategy leaves little room for error if integration synergies fail to materialize. Investors should consider whether this deployment pace is sustainable given the inherent volatility in the company's operating cash flow.
Quick answers to the most common questions about buying NOVTU stock.
Novanta Inc. Tangible Equity Units (NOVTU) generated $64.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Novanta Inc. Tangible Equity Units (NOVTU) generated $48.4M 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.
Novanta Inc. Tangible Equity Units (NOVTU) spent $15.6M 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, Novanta Inc. Tangible Equity Units (NOVTU) spent $39.3M on share repurchases. This shows the company's commitment to returning capital to its equity investors.