Cash conversion efficiency remains volatile, with the OCF/NI ratio swinging from a low of 0.48 in 2024Q1 to a high of 2.18 in 2025Q4, often pressured by aggressive shareholder returns that exceeded the $380 million FCF generated in 2026Q1.
| Cash from Operations | 1.82B | 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 % | 100.5% | 2.11% | -3.93% | 4.29% | -10.86% | 18.24% | 0.75% | -5.23% | 6.9% | - |
| Net Income | 1.48B | 1.46B | 1.65B | 1.41B | 1.25B | 1.25B | 906M | 1.12B | 1.05B | 636M |
| Depreciation & Amortization | 174M | 175M | 181M | 193M | 191M | 203M | 191M | 180M | 190M | 177M |
| Stock-Based Compensation | 36M | 80M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -100M | -104M | -31M | -61M | -16M | -92M | -51M | -8M | 127M | -35M |
| Other Non-Cash Items | 75M | -25M | 112M | 156M | 183M | 239M | 284M | 214M | 199M | 709M |
| Working Capital Changes | 140M | 15M | -344M | -67M | -51M | 154M | 150M | -33M | -15M | -37M |
| Change in Receivables | -236M | -111M | -68M | -239M | -309M | -152M | -163M | -166M | -354M | -13M |
| Change in Inventory | -65M | -25M | 26M | 15M | -65M | 14M | -76M | 60M | 24M | -109M |
| Change in Payables | 286M | 181M | 57M | 152M | 272M | 130M | 20M | -28M | 166M | 119M |
| Cash from Investing | -230M | -406M | -239M | -183M | -33M | -89M | -353M | -203M | -201M | -186M |
| Capital Expenditures | -151M | -152M | -126M | -138M | -115M | -156M | -183M | -145M | -172M | -133M |
| CapEx % of Revenue | 1.03% | 1.05% | 0.88% | 0.97% | 0.84% | 1.09% | 1.43% | 1.11% | 1.33% | 1.08% |
| Acquisitions | -90M | 0 | -162M | -36M | 15M | -80M | -53M | -47M | -50M | -53M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 11M | -254M | 58M | -9M | 67M | 34M | 3M | -6M | 18M | 0 |
| Cash from Financing | -2.69B | -2.42B | -234M | -1.35B | -3.65B | 58M | -844M | -1.13B | -1.5B | -1.4B |
| Debt Issued (Net) | -758M | -663M | 1.5B | 94M | -387M | 1.35B | 5.9B | 6M | 11M | -1M |
| Equity Issued (Net) | -956M | -809M | -1.01B | -800M | -850M | -725M | 0 | 0 | 0 | 0 |
| Dividends Paid | -655M | -647M | -606M | -539M | -465M | -393M | -260M | 0 | 0 | 0 |
| Share Repurchases | -956M | -809M | -1.01B | -800M | -850M | -725M | 0 | 0 | 0 | 0 |
| Other Financing | -318M | -302M | -118M | -105M | -1.95B | -174M | -6.49B | -1.14B | -1.51B | -1.4B |
| Net Change in Cash | -1.1B | -1.22B | 1.04B | 86M | -2.28B | 1.69B | 336M | 117M | 1.33B | 0 |
| Free Cash Flow | 1.67B | 1.44B | 1.44B | 1.49B | 1.45B | 1.59B | 1.3B | 1.32B | 1.38B | 1.32B |
| FCF Margin % | 11.39% | 10.01% | 10.08% | 10.48% | 10.56% | 11.15% | 10.17% | 10.09% | 10.67% | 10.69% |
| FCF Growth % | 14.8% | 0.49% | -3.49% | 3.04% | -9.35% | 22.9% | -2.04% | -3.92% | 4.63% | - |
| FCF per Share | 4.28 | 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 |
China property market exposure
As reported in quarterly filings, the OCF/NI ratio has fluctuated significantly, ranging from a low of 0.48 in 2024Q1 to a high of 2.18 in 2025Q4, suggesting that net income is an unreliable proxy for the company's actual ability to generate cash on a quarterly basis.
The wide variance between net income and operating cash flow indicates that accrual-based accounting adjustments, likely tied to long-term service contract recognition and project-based milestones, create significant timing mismatches. Investors should monitor whether this volatility reflects genuine operational friction or merely the inherent lumpiness of large-scale infrastructure project accounting.
Based on the provided financial statements, FCF margins have demonstrated extreme sensitivity to working capital swings, oscillating between a low of 4.1% in 2024Q1 and a peak of 20.3% in 2025Q4, which complicates the assessment of the company's underlying cash-generating efficiency.
While the service-led business model is theoretically designed to provide stable cash flows, the actual FCF trajectory appears heavily influenced by the timing of cash collections in the New Equipment segment. This inconsistency suggests that the company's cash generation is not yet as defensive as the recurring nature of its service portfolio might imply.
According to recent SEC filings, working capital changes have been the primary driver of cash flow volatility, with quarterly swings ranging from a $279 million outflow in 2024Q1 to a $398 million inflow in 2025Q4, highlighting significant cyclicality in the company's cash conversion cycle.
These substantial shifts in working capital suggest that the company's cash position is highly susceptible to the timing of customer payments and inventory management within the New Equipment segment. The reliance on large, periodic inflows to normalize cash flow warrants further investigation into the sustainability of current collection practices.
As reported in financial statements, Otis has consistently prioritized shareholder returns, with combined dividends and share repurchases frequently exceeding quarterly free cash flow, as evidenced by the $400 million buyback in 2026Q1 despite a $380 million FCF figure.
The company's commitment to returning capital to shareholders appears to be a central pillar of its post-spin strategy, yet the reliance on buybacks during periods of lower cash generation may limit financial flexibility. This approach suggests management's confidence in the long-term stability of the service portfolio, though it leaves little margin for error if cash flow generation faces sustained pressure.
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.