Cumulative operating cash flow of $3.84B over ten quarters exceeded net income of $3.80B, but quarterly conversion is volatile (OCF/NI ranged 0.48 to 2.18), and Q2 2026 FCF margin of 5.8% lags the 20.3% peak in Q4 2025.
Otis Worldwide Corporation (OTIS) cash flow statement — 9-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Cash from Operations | 1.87B | 1.6B | 1.56B | 1.63B | 1.56B | 1.75B | 1.48B | 1.47B | 1.55B | 1.45B |
| Operating CF Margin % | - | 11.06% | 10.96% | 11.45% | 11.4% | 12.24% | 11.6% | 11.2% | 12% | 11.77% |
| Operating CF Growth % | 154.88% | 2.11% | -3.93% | 4.29% | -10.86% | 18.24% | 0.75% | -5.23% | 6.9% | - |
| Net Income | 1.52B | 1.46B | 1.65B | 1.41B | 1.25B | 1.25B | 906M | 1.12B | 1.05B | 636M |
| Depreciation & Amortization | 172M | 175M | 181M | 193M | 191M | 203M | 191M | 180M | 190M | 177M |
| Stock-Based Compensation | 36M | 80M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -68M | -104M | -31M | -61M | -16M | -92M | -51M | -8M | 127M | -35M |
| Other Non-Cash Items | 63M | -25M | 112M | 156M | 183M | 239M | 284M | 214M | 199M | 709M |
| Working Capital Changes | 139M | 15M | -344M | -67M | -51M | 154M | 150M | -33M | -15M | -37M |
| Change in Receivables | -265M | -111M | -68M | -239M | -309M | -152M | -163M | -166M | -354M | -13M |
| Change in Inventory | -89M | -25M | 26M | 15M | -65M | 14M | -76M | 60M | 24M | -109M |
| Change in Payables | 345M | 181M | 57M | 152M | 272M | 130M | 20M | -28M | 166M | 119M |
| Cash from Investing | -402M | -406M | -239M | -183M | -33M | -89M | -353M | -203M | -201M | -186M |
| Capital Expenditures | -159M | -152M | -126M | -138M | -115M | -156M | -183M | -145M | -172M | -133M |
| CapEx % of Revenue | 1.07% | 1.05% | 0.88% | 0.97% | 0.84% | 1.09% | 1.43% | 1.11% | 1.33% | 1.08% |
| Acquisitions | -254M | -109M | -162M | -36M | 15M | -80M | -53M | -47M | -50M | -53M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 11M | -145M | 58M | -9M | 67M | 34M | 3M | -6M | 18M | 0 |
| Cash from Financing | -1.32B | -2.42B | -234M | -1.35B | -3.65B | 58M | -844M | -1.13B | -1.5B | -1.4B |
| Debt Issued (Net) | 691M | -663M | 1.5B | 94M | -387M | 1.35B | 5.9B | 6M | 11M | -1M |
| Equity Issued (Net) | -1.05B | -809M | -1.01B | -800M | -850M | -725M | 0 | 0 | 0 | 0 |
| Dividends Paid | -658M | -647M | -606M | -539M | -465M | -393M | -260M | 0 | 0 | 0 |
| Share Repurchases | -1.05B | -809M | -1.01B | -800M | -850M | -725M | 0 | 0 | 0 | 0 |
| Other Financing | -298M | -302M | -118M | -105M | -1.95B | -174M | -6.49B | -1.14B | -1.51B | -1.4B |
| Net Change in Cash | 133M | -1.22B | 1.04B | 86M | -2.28B | 1.69B | 336M | 117M | 1.33B | 0 |
| Free Cash Flow | 1.71B | 1.44B | 1.44B | 1.49B | 1.45B | 1.59B | 1.3B | 1.32B | 1.38B | 1.32B |
| FCF Margin % | 11.48% | 10.01% | 10.08% | 10.48% | 10.56% | 11.15% | 10.17% | 10.09% | 10.67% | 10.69% |
| FCF Growth % | 27% | 0.49% | -3.49% | 3.04% | -9.35% | 22.9% | -2.04% | -3.92% | 4.63% | - |
| FCF per Share | 4.43 | 3.67 | 3.55 | 3.59 | 3.42 | 3.69 | 2.98 | 3.06 | 3.18 | 3.02 |
| FCF Conversion (FCF/Net Income) | 1.13x | 1.15x | 0.95x | 1.16x | 1.25x | 1.40x | 1.63x | 1.32x | 1.48x | 2.28x |
| Interest Paid | 0 | 0 | 172M | 132M | 134M | 129M | 81M | 18M | 20M | 17M |
| Taxes Paid | 0 | 0 | 586M | 546M | 562M | 552M | 561M | 632M | 607M | 692M |
Quick answers to the most common questions about buying OTIS stock.
Otis Worldwide Corporation (OTIS) generated $1.60B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Otis Worldwide Corporation (OTIS) generated $1.44B 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.
Otis Worldwide Corporation (OTIS) spent $152.0M 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, Otis Worldwide Corporation (OTIS) returned $647.0M to shareholders via cash dividends and spent $809.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
China new equipment weakness
Metrics are mathematically derived from official filings.
Cash Conversion Volatility Persists
Otis's operating cash flow to net income ratio swung from 0.48 in Q1 2024 to 2.18 in Q4 2025, according to reported figures, indicating significant quarterly volatility in earnings quality.
The wide oscillation in OCF/NI, from 0.48 to 2.18, suggests that working capital swings, not core profitability, drive cash conversion. Q2 2026's ratio of 0.62, with a $202 million working capital outflow, implies that timing of collections and payables may be masking underlying earnings strength. Investors should monitor whether this volatility smooths out over longer periods, as it may indicate that reported net income is not a reliable proxy for cash generation in any given quarter.
FCF Growth Lags Revenue Momentum
Free cash flow margin improved to 5.8% in Q2 2026 from 4.1% a year earlier, as per financial statements, but remains below the 20.3% peak seen in Q4 2025.
The sequential decline in FCF margin from 20.3% in Q4 2025 to 5.8% in Q2 2026 highlights the lumpy nature of working capital, particularly the $202 million outflow in Q2. Despite accelerating revenue growth, FCF generation has not kept pace, suggesting that the company may be funding growth through working capital. This pattern warrants attention, as sustained FCF margins below 10% could limit the company's ability to maintain its aggressive capital returns program.
Capital Intensity Remains Modest
Capital expenditures averaged roughly 1% of revenue over the past ten quarters, as reported in SEC filings, indicating a low capital intensity business model.
With CapEx consistently around $30-45 million per quarter, Otis's capital requirements are minimal relative to its revenue base, which is typical for a service-led industrial. This low capital intensity supports strong FCF conversion and allows for substantial cash returns to shareholders. However, the modest CapEx may also suggest underinvestment in digital infrastructure, which could be critical for long-term service efficiency and competitive positioning.
Working Capital Swings Dominate Cash Flow
Working capital changes ranged from a $398 million inflow in Q4 2025 to a $279 million outflow in Q1 2024, based on reported data, creating significant quarterly cash flow volatility.
The extreme swings in working capital, particularly the $398 million inflow in Q4 2025 and the $202 million outflow in Q2 2026, suggest that Otis's cash flow is heavily influenced by the timing of project milestones and collections, especially in the New Equipment segment. This pattern is consistent with percentage-of-completion accounting, which can decouple reported revenue from cash receipts. Investors should focus on annual working capital trends rather than quarterly figures to assess the underlying efficiency of the company's cash conversion cycle.
Aggressive Returns Despite Cash Flow Variability
Otis returned over $1.5 billion to shareholders in the first half of 2026 through dividends and buybacks, as per financial statements, exceeding its operating cash flow of $680 million.
The company's capital deployment strategy is aggressive, with buybacks averaging over $300 million per quarter and dividends steadily increasing. In Q2 2026, total cash returned to shareholders ($574 million) exceeded operating cash flow ($267 million), indicating that the company is funding shareholder returns through balance sheet cash or debt. While this may signal confidence in future cash generation, it also raises questions about sustainability if working capital outflows persist. Investors should monitor whether the pace of buybacks is adjusted to align with actual cash generation.
Cumulative Cash Generation Exceeds Net Income
Over the past ten quarters, cumulative operating cash flow of $3.84 billion surpassed cumulative net income of $3.80 billion, according to reported figures, indicating high earnings quality.
The near parity between cumulative operating cash flow and net income suggests that, over time, Otis's earnings are well-supported by cash generation, despite quarterly volatility. This is a positive signal for earnings quality, as it implies that accruals are not systematically inflating reported profits. However, the divergence in individual quarters, such as Q2 2026 where OCF/NI was 0.62, highlights the importance of analyzing cash flow over multiple periods to smooth out working capital timing effects.
Cash Flow Statement Obscures Timing Effects
The cash flow statement's working capital line, which swung by $600 million between quarters, as per reported data, may obscure the underlying stability of Otis's service-led cash generation.
The significant working capital swings, particularly in Q4 2025 and Q2 2026, are likely driven by the New Equipment segment's project-based revenue recognition, which can cause cash collections to lag or lead reported revenue. This obscures the more predictable cash flows from the Service segment, which are the core of the investment thesis. Additionally, the absence of stock-based compensation in most quarters suggests that reported earnings are not significantly diluted by non-cash charges, but investors should be aware that the cash flow statement may not fully reflect the timing of modernization project cash flows.