Novavax, Inc. (NVAX) Cash Flow Statement

The OCF/NI ratio of -0.36 in 2025Q1 indicates that reported profitability was not backed by cash generation, likely due to large working capital outflows. Even in profitable quarters like 2025Q2 (net income $106.5M), operating cash flow was -$127.5M, underscoring persistent cash conversion issues. This pattern suggests that earnings quality is weak, with accruals playing a significant role in reported profits.

The FCF margin ranged from -198.6% in 2024Q4 to +150.2% in 2025Q3, indicating that the company's cash generation is highly unpredictable and tied to milestone payments and working capital swings. The recent trend shows a return to negative FCF, with 2026Q2 FCF margin at -130.8%, suggesting that the company is not sustainably generating cash from operations. This volatility makes it difficult for investors to rely on FCF as a stable metric for valuation.

CapEx has been consistently low, ranging from $0.2M to $7.2M per quarter, which suggests that Novavax is not investing heavily in fixed assets. This is typical for a biotech that outsources manufacturing, but it also means that the company's cash burn is primarily driven by operating expenses and working capital needs. The low CapEx/Rev ratio implies that the company is not building significant tangible assets, which may limit its ability to scale production without external partners.

The extreme volatility in working capital changes is the primary driver of the divergence between net income and operating cash flow. For instance, in 2025Q1, a $739.6M negative working capital change overwhelmed the $518.6M net income, leading to a $185.5M cash outflow. This suggests that Novavax's cash flow is heavily influenced by the timing of collections from customers and payments to suppliers, which may be tied to the lumpy nature of vaccine orders. Investors should monitor the company's ability to manage these swings, as they can create liquidity pressures.

The company is not returning capital to shareholders, which is typical for a biotech in a cash-burn phase. The small buyback in 2026Q2 is immaterial relative to the company's cash needs. Instead, the company is likely using its cash reserves to fund operations and R&D, as evidenced by the persistent negative FCF. This suggests that investors are relying on future pipeline success rather than current cash returns.

This cumulative divergence highlights that Novavax's reported profitability has not translated into cash generation. The gap is largely due to massive working capital outflows, particularly in 2025Q1, and suggests that the company's earnings are not backed by cash. This raises concerns about the sustainability of its business model, as the company may need to raise additional capital to fund operations if this trend continues.