While operating cash flow remains strong with an OCF/NI ratio of 2.27 in 2026Q1, the company's liquidity remains sensitive to volatile working capital swings and significant stock-based compensation expenses of $6.9 million.
| Cash from Operations | 56.88M | 51.67M | 49.93M | 18.65M |
| Operating CF Margin % | - | 32.38% | 41.85% | 21.97% |
| Operating CF Growth % | 45.37% | 3.49% | 167.74% | - |
| Net Income | 34.82M | 37.41M | 34.59M | 17.89M |
| Depreciation & Amortization | 3.71M | 3.71M | 3.03M | 2.18M |
| Stock-Based Compensation | 18.2M | 11.42M | 296K | 41K |
| Deferred Taxes | 2.01M | 2M | -612K | -2.19M |
| Other Non-Cash Items | -1.33M | 632K | 6.33M | 1.78M |
| Working Capital Changes | 304K | -3.51M | 6.29M | -1.05M |
| Change in Receivables | -1.12M | -2.62M | -1.21M | -903K |
| Change in Inventory | 0 | 0 | 0 | 0 |
| Change in Payables | -56K | 4.24M | 2.3M | 2.07M |
| Cash from Investing | -4.13M | -3.98M | -3.71M | -4.03M |
| Capital Expenditures | -1.1M | -3.98M | -3.71M | -4.03M |
| CapEx % of Revenue | 0.89% | 2.49% | 3.11% | 4.75% |
| Acquisitions | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - |
| Other Investing | -3.04M | 0 | 0 | 0 |
| Cash from Financing | -35.61M | -35.21M | -42.47M | -9.87M |
| Debt Issued (Net) | -67M | 105M | -43.52M | 108.65M |
| Equity Issued (Net) | 1.18M | 15.71M | 0 | 219.06M |
| Dividends Paid | -87.5M | -175M | 0 | -339.02M |
| Share Repurchases | 0 | 0 | 0 | -10M |
| Other Financing | 117.7M | 19.08M | 1.06M | 1.44M |
| Net Change in Cash | 17.13M | 12.48M | 3.75M | 4.75M |
| Free Cash Flow | 55.78M | 47.69M | 46.21M | 14.62M |
| FCF Margin % | 45.12% | 29.89% | 38.74% | 17.22% |
| FCF Growth % | - | 3.2% | 216.16% | - |
| FCF per Share | 0.38 | 0.35 | 4.95 | 1.56 |
| FCF Conversion (FCF/Net Income) | 1.60x | 1.38x | 1.44x | 1.04x |
| Interest Paid | 0 | 17.13M | 17.07M | 20.1M |
| Taxes Paid | 0 | 20.15M | 7.31M | 8.6M |
Thin liquidity and reinsurance dependence
According to the provided quarterly data, Neptune consistently reports operating cash flow exceeding net income, with an OCF/NI ratio reaching 2.27 in 2026Q1, suggesting that the company's reported profitability is supported by strong cash generation rather than aggressive accounting accruals or non-cash revenue recognition.
The consistent premium of operating cash flow over net income indicates a high quality of earnings, likely driven by the MGA model's ability to collect commissions upfront. Investors should monitor whether this conversion efficiency persists if the company shifts its product mix or faces increased regulatory scrutiny regarding commission timing.
As reported in recent financial statements, Neptune's free cash flow margins have fluctuated significantly, peaking at 41.3% in 2026Q1, which reflects the inherent sensitivity of the MGA model to timing differences in commission receipts and the absence of heavy capital expenditure requirements.
While the high FCF margins are impressive, the lack of stability in these figures suggests that cash flow is highly sensitive to the timing of policy renewals and reinsurance settlements. This volatility warrants further investigation into whether the company can maintain consistent cash generation during periods of lower policy volume or market disruption.
Based on the reported figures, Neptune's working capital changes have been erratic, swinging from a $6.0 million outflow in 2025Q4 to a $1.4 million inflow in 2026Q1, highlighting the company's reliance on efficient cash management to maintain its thin liquidity position.
The rapid shifts in working capital suggest that Neptune's cash position is highly susceptible to the timing of payments from its reinsurance partners. Given the low absolute cash balance, any delay in these settlements could potentially strain the company's ability to fund its ongoing operational requirements.
Analysis of the cash flow statement reveals that stock-based compensation reached $6.9 million in 2026Q1, a substantial figure that effectively masks the true economic cost of operations and suggests that reported net income may be overstated relative to the dilution experienced by shareholders.
The significant reliance on stock-based compensation as a non-cash adjustment to net income warrants caution, as it obscures the actual cash cost of talent acquisition. Investors should consider whether this level of compensation is sustainable or if it will eventually necessitate a larger cash outlay to retain key personnel.
Quick answers to the most common questions about buying NP stock.
Neptune Insurance Holdings Inc. (NP) generated $51.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Neptune Insurance Holdings Inc. (NP) generated $47.7M 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.
Neptune Insurance Holdings Inc. (NP) spent $4.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Neptune Insurance Holdings Inc. (NP) returned $175.0M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.