Earnings quality remains strained, evidenced by a profound disconnect between net income and operating cash flow, highlighted by an OCF/NI ratio of -27.13 in 2024Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Cash from Operations | -3.8B | -1.4B | -4.53B | -1.58B | 6.03B | 2.56B | -6.2B | -2.15B | 572.4M | -883.59M | -938.52M | 53.14M | -578.95M | -98.39M | -308.06M | -74.72M |
| Operating CF Margin % | - | -32.08% | -284.44% | -77.59% | 259.89% | 72.02% | -156.83% | -127.82% | 50.33% | -81.77% | -92.56% | 6.83% | -109.88% | -24.26% | -112.86% | -97.47% |
| Operating CF Growth % | -190.88% | 69.12% | -186.51% | -126.23% | 135.39% | 141.35% | -188.73% | -475.09% | 164.78% | 5.85% | -1866% | 109.18% | -488.43% | 68.06% | -312.29% | - |
| Net Income | 507.12M | 501.08M | 311.42M | 144.66M | 475.51M | 1B | 1.65B | 392.96M | 244.44M | 311.52M | 336.98M | 247.56M | 196.31M | 172.16M | 118.32M | 14.7M |
| Depreciation & Amortization | 64.93M | 69.36M | 69.66M | 70.02M | 50.24M | 42.94M | 37.86M | 25.18M | 258.81M | 281.63M | 306.12M | 155.55M | 42.87M | 30.27M | 12.77M | 9.69M |
| Stock-Based Compensation | 27.59M | 0 | 20.87M | 27.58M | 42.55M | 37.79M | 45.1M | 24.77M | 25.25M | 20.7M | 16.2M | 17.52M | 10.33M | 3.94M | 20.31M | 1.12M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 425.88M | -779.61M | 0 | 39.52M | 105.83M | 35.5M | 30.22M | 18.83M | 197K | -650K | 114K |
| Other Non-Cash Items | -4.61B | -2.21B | -4.73B | -1.84B | 5.16B | 1.07B | -6.65B | -2.6B | 31.65M | -1.47B | -1.6B | -374.62M | -795.64M | -282.51M | -472.85M | -97.24M |
| Working Capital Changes | 215.61M | 241.2M | -209.54M | 11.24M | 309.52M | -17.99M | -496.14M | 10.44M | -27.29M | -136.1M | -29.64M | -23.08M | -51.65M | -22.45M | 14.04M | -3.09M |
| Change in Receivables | 3.33M | 3.1M | -4.46M | 5.67M | 2.78M | 35.24M | -48.32M | -20.26M | -9.67M | -10.8M | 2.76M | 7.34M | -302K | 230K | -173K | -7.32M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -42.57M | -37.82M | -84.11M | -86.46M | -89.7M | -26.36M | -2.5M | -2.95M |
| Change in Payables | 65.96M | 262.85M | -78.65M | 121.68M | -109.48M | 34.67M | 135.31M | 38.55M | 32.75M | -41.41M | 33.04M | 26.31M | 16.44M | 10.11M | 22.7M | 8.6M |
| Cash from Investing | 3.98B | 300.42M | -1.89B | -273.29M | -721.58M | -304.37M | 783.03M | 50.66M | -322.61M | -339.23M | -34.74M | -563.14M | 6.75M | -284.78M | -45.53M | -12.39M |
| Capital Expenditures | -26.35M | -51.2M | -1.72M | -36.17M | -7.16M | -56.88M | -84.23M | -262.95M | -258.53M | -202.31M | -30.54M | -394.73M | -140.22M | -202.83M | -3.87M | -3.35M |
| CapEx % of Revenue | 0.74% | 1.17% | 0.11% | 1.77% | 0.31% | 1.6% | 2.13% | 15.65% | 22.73% | 18.72% | 3.01% | 50.73% | 26.61% | 50.01% | 1.42% | 4.37% |
| Acquisitions | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Investments | 0 | 9.32B | 421.5M | 11.39M | 13.12M | 8.17M | 16.32M | 76.28M | 119.22M | 171.28M | 87.19M | 47.46M | 23.27M | 144.3M | 55.06M | 17.29M |
| Other Investing | 340.88M | 710.69M | -136.71M | -142.59M | 162.78M | 227.54M | -105.19M | 291.53M | -239.22M | -16.18M | 62.76M | 239.79M | 7.45M | -81.95M | -41.66M | -9.04M |
| Cash from Financing | 2.29B | 1.16B | 5.72B | 1.47B | -4.32B | -2.45B | 5.76B | 2.13B | -132.03M | 1.16B | 967.16M | 539.21M | 617.82M | 401.49M | 349.45M | 97.64M |
| Debt Issued (Net) | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | 2.65M | 4.33M | 0 | -80.63M | -406.09M | -967.19M | -342.74M | 4.09M | -5.29M | -8.6M | 0 | 0 | 0 | 230M | 0 | 0 |
| Dividends Paid | -47.55M | -62.55M | -52.16M | -41.45M | -54.62M | -52.9M | -30.95M | -9.71M | -10.05M | 0 | 0 | 0 | 0 | 0 | -15.85M | 0 |
| Share Repurchases | -4.74M | -4.74M | 0 | -71.49M | -406.09M | -958.19M | -337.48M | -1.06M | -5.29M | -8.6M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 35.72M | 0 | 4.9B | 748.96M | -4.32B | -2.4B | 5.5B | -4.63M | -460.33M | 623M | 560.43M | -81.43M | 322.84M | 37.4M | 15.05M | 18.13M |
| Net Change in Cash | 90.59M | 63.2M | -699.89M | -390.17M | 988.45M | -192.69M | 344.2M | 33M | 117.75M | -61.64M | -6.11M | 29.22M | 45.62M | 18.32M | -4.14M | 10.54M |
| Free Cash Flow | -3.83B | -1.41B | -4.56B | -1.62B | 5.95B | 2.51B | -6.28B | -2.15B | 313.87M | -1.09B | -969.06M | -341.58M | -719.17M | -301.22M | -311.93M | -78.07M |
| FCF Margin % | -108.09% | -32.35% | -285.83% | -79.37% | 256.32% | 70.42% | -158.96% | -128.18% | 27.6% | -100.5% | -95.57% | -43.9% | -136.5% | -74.26% | -114.27% | -101.84% |
| FCF Growth % | -47.61% | 69.01% | -181.48% | -127.2% | 137.42% | 139.89% | -191.82% | -786% | 128.9% | -12.06% | -183.7% | 52.5% | -138.75% | 3.43% | -299.55% | - |
| FCF per Share | -71.10 | -26.20 | -85.38 | -30.69 | 106.35 | 37.14 | -79.81 | -26.80 | 8.89 | -13.76 | -12.65 | -4.49 | -9.47 | -3.97 | -28.07 | -7.03 |
| FCF Conversion (FCF/Net Income) | -7.55x | -2.79x | -14.56x | -10.94x | 12.69x | 2.55x | -3.76x | -5.46x | 6.53x | -8.77x | -14.20x | 1.13x | -15.71x | -6.83x | -2.60x | -5.08x |
| Interest Paid | 495.1M | 0 | 797.21M | 0 | 329.98M | 389.53M | 272.97M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 2.1M | 0 | 1.49M | 0 | 0 | 293.13M | 475.59M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Extreme operating cash volatility
As reported in quarterly filings, PFSI exhibits a profound divergence between net income and operating cash flow, evidenced by an OCF/NI ratio that plummeted to -27.13 in 2024Q1, suggesting that reported profits frequently fail to translate into actual liquidity for the mortgage banking operation.
The persistent gap between accounting earnings and cash generation appears to be driven by the non-cash nature of mortgage servicing rights valuation. Investors should monitor this disconnect, as it implies that the company's reported profitability may be structurally decoupled from its ability to generate sustainable cash inflows.
Based on the provided financial data, PFSI's free cash flow trajectory remains highly erratic, with quarterly figures swinging from a positive $1.1B in 2025Q1 to a deficit of $2.2B in 2024Q4, reflecting the inherent instability of a business model heavily reliant on mortgage market cycles.
This extreme variance in free cash flow suggests that the company's liquidity position is subject to significant external shocks. The inability to maintain consistent positive cash flow indicates that the firm's operational model may be more sensitive to interest rate fluctuations than traditional valuation metrics typically account for.
According to recent financial statements, PFSI's working capital changes have been highly inconsistent, ranging from a $222.3M inflow in 2025Q4 to a $298.3M outflow in 2024Q1, which complicates the assessment of the company's underlying operational efficiency and its ability to manage short-term liquidity requirements.
These fluctuations in working capital appear to be a byproduct of the timing of loan originations and subsequent sales in the correspondent channel. The lack of a stable working capital trend warrants further investigation into how the company manages its warehouse financing lines during periods of market stress.
As indicated by the provided cash flow statements, the company's reliance on non-cash adjustments and fair value accounting creates a misleading picture of operational health, as evidenced by the extreme volatility in operating cash flow that often contradicts the reported net income figures across multiple quarters.
The cash flow statement appears to be heavily influenced by the accounting treatment of MSRs, which may obscure the true cash-generating capacity of the servicing segment. Analysts should be cautious, as these non-cash items can mask underlying operational weaknesses that only become apparent during periods of market contraction.
Quick answers to the most common questions about buying PFSI stock.
PennyMac Financial Services, Inc. (PFSI) generated $-1399.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
PennyMac Financial Services, Inc. (PFSI) reported negative free cash flow of $1.41B in 2025, indicating capital requirements exceeded cash from operations.
PennyMac Financial Services, Inc. (PFSI) spent $51.2M 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, PennyMac Financial Services, Inc. (PFSI) returned $62.5M to shareholders via cash dividends and spent $4.7M on share repurchases. This shows the company's commitment to returning capital to its equity investors.