Free cash flow remains highly unstable, evidenced by a 2026Q1 CapEx/Revenue ratio of 11.8% and erratic OCF/NI conversion ratios that swung from -5.88 in 2025Q4 to 0.86 in 2026Q1.
| Cash from Operations | 1.88B | 2.57B | -3.42B | 4B | 3.55B | 898.01M | 2.15B | 489.08M | -1.87B | 471.3M | 71.88M | 56.37M | 17.56M |
| Operating CF Margin % | - | 13.3% | -18.63% | 25.51% | 23.41% | 8.72% | 32.2% | 8.76% | -46.08% | 18.74% | 6.34% | 8.49% | 5.42% |
| Operating CF Growth % | 104.9% | 175.34% | -185.41% | 12.7% | 295.2% | -58.28% | 340.14% | 126.17% | -496.57% | 555.64% | 27.51% | 221.09% | - |
| Net Income | 2.14B | 2.08B | 2.38B | 2.02B | 1.76B | 1.49B | 1.77B | 1.39B | 963.85M | 497.45M | 118.75M | 41.55M | 29.33M |
| Depreciation & Amortization | 1.83B | 1.77B | 1.6B | 1.36B | 1.13B | 768.59M | 376.33M | 130.88M | 101.09M | 53.58M | 29.17M | 22.42M | 13.14M |
| Stock-Based Compensation | 33.03M | 0 | 178.69M | 144.62M | 127.39M | 370.63M | 122.87M | 23.23M | 68.24M | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | -4.64M | -84.29M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 6.92B | 6.44B | 3.49B | 3.97B | 4.53B | 2.05B | 533.55M | 3.61B | 5.14B | 800.28M | 519.08M | 729.77M | 561.64M |
| Working Capital Changes | -9.2B | -7.72B | -11.06B | -3.49B | -4B | -3.78B | -570.49M | -2.24B | -3.84B | -380.86M | -263.51M | 12.35M | -3.81M |
| Change in Receivables | -10.79B | -6.62B | -21.69B | -10.5B | -17.67B | -9.4B | -5.83B | -3.28B | -5.38B | -2.16B | -707.9M | -712.87M | -545.31M |
| Change in Inventory | 0 | 0 | 5.22M | -19.71M | 36.26M | -132.4M | 31.6M | 14.5M | -49.83M | -42.17M | 18.84M | -29.72M | -15.64M |
| Change in Payables | -25.32M | -52.84M | 148.6M | 3.4B | -133.85M | 243.59M | 72.33M | 1.11B | 1.4B | 1.81B | 415.79M | 37.71M | 4.48M |
| Cash from Investing | -2.08B | -2.25B | -1.83B | -2.7B | -2.18B | -1.47B | -1.86B | -1.87B | -30.75M | -215.31M | -189.82M | -49.64M | -25.55M |
| Capital Expenditures | -1.64B | -2.23B | -1.13B | -951.56M | -1.1B | -972.27M | -1.52B | -707.09M | -268.83M | -111.74M | -67.59M | -49.86M | -25.72M |
| CapEx % of Revenue | 8.28% | 11.53% | 6.17% | 6.07% | 7.23% | 9.44% | 22.78% | 12.67% | 6.63% | 4.44% | 5.97% | 7.51% | 7.94% |
| Acquisitions | 0 | 0 | 0 | -31.31M | 0 | -43.37M | -345.6M | -34.62M | 14.29M | -23.09M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -326.59M | 0 | -698.21M | -1.72B | -1.09B | -455.31M | -523.78M | -367.97M | 4.93M | -53.48M | -61.86M | -9.77M | -7.84M |
| Cash from Financing | -90.12M | -443.29M | 3.27B | -225.99M | -1.33B | 727.24M | -55.06M | -1.77M | 4.76B | -269.71M | 186.17M | 0 | 0 |
| Debt Issued (Net) | -1.66B | 1.54B | 4.14B | 183.03M | -981.32M | 996.94M | 0 | 0 | 0 | -199.48M | 199.39M | 0 | 0 |
| Equity Issued (Net) | -1.4B | -1.3B | -784.46M | -399.41M | -291.44M | -257.99M | -44.77M | -1.74M | 4.68B | 0 | 0 | 0 | 0 |
| Dividends Paid | -792.97M | -604.93M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -56.39M | 0 | 0 | 0 |
| Share Repurchases | -1.4B | -1.3B | -784.46M | -399.41M | -291.44M | -257.99M | -44.77M | -1.74M | -39.53M | 0 | 0 | 0 | 0 |
| Other Financing | 3.76B | -78.59M | -81.99M | -9.61M | -56.93M | -11.71M | -10.29M | -16.21M | -174.56M | -5.83M | 0 | 0 | 0 |
| Net Change in Cash | 684.16M | 1.03B | -1.97B | 1.07B | 34.73M | 154.3M | 236.11M | -1.36B | 2.7B | -13.2M | 73.08M | 5.69M | -7.99M |
| Free Cash Flow | 359.93M | 1.55B | -5.74B | 2.01B | 1.41B | -853.82M | 106.11M | -218.01M | -2.14B | 359.56M | 4.29M | 6.51M | -8.16M |
| FCF Margin % | 1.82% | 8.03% | -31.29% | 12.83% | 9.32% | -8.29% | 1.59% | -3.91% | -52.71% | 14.3% | 0.38% | 0.98% | -2.52% |
| FCF Growth % | 105.36% | 127.09% | -385.22% | 42.39% | 265.44% | -904.66% | 148.67% | 89.8% | -694.57% | 8273.48% | -34.07% | 179.78% | - |
| FCF per Share | 1.27 | 5.22 | -17.96 | 6.21 | 4.29 | -2.57 | 0.32 | -0.66 | -6.72 | 1.14 | 0.01 | 0.02 | -0.03 |
| FCF Conversion (FCF/Net Income) | 0.17x | 1.24x | -1.61x | 2.42x | 2.36x | 0.77x | 1.67x | 0.36x | -2.06x | 0.98x | 0.57x | 1.61x | 0.68x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working capital volatility
As reported in recent financial statements, the relationship between net income and operating cash flow for PAGS has been highly erratic, with the OCF/NI ratio swinging from a negative 5.88 in 2025Q4 to a positive 0.86 in 2026Q1, indicating significant underlying accrual-based accounting noise.
The wide variance between net income and operating cash flow suggests that reported earnings are heavily influenced by non-cash adjustments and timing differences in merchant receivables. Investors should monitor whether this instability reflects genuine operational friction or merely the accounting treatment of the prepayment business model.
Based on the company's reported figures, free cash flow margins have exhibited extreme volatility, ranging from a negative 117.3% in 2024Q2 to a positive 44.5% in 2024Q1, highlighting a lack of consistent cash generation relative to the company's reported net income performance.
The inability to maintain a stable FCF trajectory suggests that the business remains highly sensitive to working capital cycles and capital expenditure requirements. This inconsistency warrants further investigation into whether the company's growth strategy is fundamentally cash-generative or if it requires constant capital reinvestment to sustain volume.
According to quarterly filings, PAGS experienced massive working capital outflows, including a $5.8B drain in 2025Q4, which directly dictates the company's cash flow reality and often overwhelms the steady, positive net income figures reported in the same periods.
The massive fluctuations in working capital appear to be tied to the timing of merchant settlements and the funding of the prepayment portfolio. This suggests that the company's cash position is highly vulnerable to shifts in merchant behavior and the liquidity requirements of its core acquiring business.
As indicated by recent SEC filings, the company's CapEx/Revenue ratio has fluctuated significantly, peaking at 11.8% in 2026Q1, which suggests that maintaining the hardware-centric POS ecosystem requires continuous and substantial capital investment to support the company's competitive positioning in the Brazilian market.
The persistent need for capital expenditure to support hardware distribution may be limiting the company's ability to convert its operating income into free cash flow. This capital intensity appears to be a structural feature of the business model that may constrain future dividend capacity or aggressive share repurchases.
Based on reported financial data, PAGS has prioritized share buybacks and dividend payments, such as the $602.4M in buybacks during 2025Q4, even during periods where operating cash flow was significantly negative, raising questions about the sustainability of this capital allocation strategy.
The decision to return capital to shareholders while simultaneously experiencing large working capital outflows suggests a management focus on supporting the stock price. Investors should monitor whether this deployment strategy is sustainable if the core payment business faces further margin compression from regulatory or competitive pressures.
Quick answers to the most common questions about buying PAGS stock.
PagSeguro Digital Ltd. (PAGS) generated $2.57B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
PagSeguro Digital Ltd. (PAGS) generated $1.55B 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.
PagSeguro Digital Ltd. (PAGS) spent $2.23B 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, PagSeguro Digital Ltd. (PAGS) returned $604.9M to shareholders via cash dividends and spent $1.30B on share repurchases. This shows the company's commitment to returning capital to its equity investors.