The free cash flow burn has narrowed substantially from -$84.9M in 2025Q1 to -$1.9M in 2026Q2, but the business has generated negative free cash flow in every period, and stock-based compensation averaging over $6 million per quarter obscures the true underlying cash cost of operations.
Phathom Pharmaceuticals, Inc. (PHAT) cash flow statement — 8-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Cash from Operations | -36.69M | -166.78M | -266.77M | -137.58M | -146.53M | -148.46M | -69.69M | -36.51M | -1.02M |
| Operating CF Margin % | - | -95.24% | -482.82% | -20173.02% | - | - | - | - | - |
| Operating CF Growth % | 348.42% | 37.48% | -93.9% | 6.11% | 1.3% | -113.03% | -90.87% | -3468.91% | - |
| Net Income | -81.49M | -221.25M | -334.33M | -201.59M | -197.72M | -143.88M | -129.07M | -255.13M | -1.29M |
| Depreciation & Amortization | 508K | 633K | 795K | 575K | 620K | 521K | 323K | 8K | 0 |
| Stock-Based Compensation | 27.15M | 28.72M | 24.05M | 45.02M | 24.13M | 16.81M | 5.84M | 406K | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 32.23M | 37.5M | 58.01M | 32.06M | 21M | 5.41M | 1.5M | 227.73M | 50K |
| Working Capital Changes | 2.49M | -12.38M | -15.3M | -13.64M | 5.44M | -27.32M | 51.72M | -9.52M | 215K |
| Change in Receivables | -46.17M | -39.33M | -37.16M | -1.64M | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -894K | -11.78M | -6.14M | -9.44M | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 48.96M | 34.1M | 34.94M | 6.41M | 8.68M | -9.79M | 24.01M | 2.27M | 225K |
| Cash from Investing | -219K | -229K | -135K | -1.63M | -1.04M | -328K | -1.04M | -25.25M | 0 |
| Capital Expenditures | 115K | -229K | -135K | -1.63M | -1.04M | -328K | -1.04M | -132K | 0 |
| CapEx % of Revenue | 0.05% | 0.13% | 0.24% | 239.59% | - | - | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | -334K | 0 | 0 | 0 | 0 | 0 | 0 | -25.12M | 0 |
| Cash from Financing | 69.82M | -288K | 182.77M | 367.58M | 120.04M | 44.71M | 114.46M | 304.65M | 1.9M |
| Debt Issued (Net) | -55.8M | 0 | 59.4M | 39.32M | 95.45M | 42.76M | 25M | 113.17M | 1.9M |
| Equity Issued (Net) | 122.48M | 1.64M | 121.78M | 155.46M | 24.6M | 0 | 88.83M | 191.47M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 3.13M | -1.93M | 1.6M | 172.8M | 0 | 1.94M | 629K | 0 | 2K |
| Net Change in Cash | 32.91M | -167.29M | -84.13M | 228.37M | -27.87M | -104.08M | 43.73M | 242.89M | 879K |
| Free Cash Flow | -36.54M | -166.78M | -266.9M | -139.21M | -147.57M | -148.78M | -70.73M | -61.76M | -1.02M |
| FCF Margin % | -15.25% | -95.24% | -483.07% | -20412.61% | - | - | - | - | - |
| FCF Growth % | 86.69% | 37.52% | -91.72% | 5.66% | 0.82% | -110.36% | -14.52% | -5937.15% | - |
| FCF per Share | -0.44 | -2.29 | -4.22 | -2.71 | -3.77 | -4.02 | -2.13 | -2.50 | -0.12 |
| FCF Conversion (FCF/Net Income) | 0.45x | 0.75x | 0.80x | 0.68x | 0.74x | 1.03x | 0.54x | 0.17x | 0.79x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 4.07M | 3.46M | 1.01M | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying PHAT stock.
Phathom Pharmaceuticals, Inc. (PHAT) generated $-166.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Phathom Pharmaceuticals, Inc. (PHAT) reported negative free cash flow of $166.8M in 2025, indicating capital requirements exceeded cash from operations.
Phathom Pharmaceuticals, Inc. (PHAT) spent $0.2M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
Persistent negative free cash flow
Metrics are mathematically derived from official filings.
Cash Burn Consistent with Net Losses
Operating cash flow has been consistently negative and has tracked net losses closely, with the ratio of operating cash flow to net income ranging from 0.52 to 0.90 in loss-making quarters, as reported in the company's financial statements.
The persistent negative operating cash flow relative to net income is driven by substantial non-cash charges, primarily stock-based compensation, which add back to cash flow but do not mask the underlying cash burn. The narrow gap between operating cash flow and net income in most periods suggests the losses are fundamentally cash-consuming, not merely accounting-driven, with working capital swings providing minor offsets.
FCF Burn Narrows but Remains Deeply Negative
Free cash flow has improved from a severe burn rate of -$84.9M in 2025Q1 to -$1.9M in 2026Q2, a dramatic narrowing, yet the company has generated negative FCF in every single period shown, according to the reported data.
The trajectory shows a clear inflection in the cash burn profile, coinciding with the revenue ramp, but the business remains far from cash-flow breakeven. The current FCF margin of -2.5% is a significant improvement from triple-digit negatives, indicating that operating leverage is beginning to translate into a less unsustainable cash consumption rate. However, the absolute magnitude of the burn still requires significant capital infusion or a faster path to profitability.
Working Capital Swings Mask Underlying Burn
Significant quarterly swings in working capital, ranging from a -$9.0M drain in 2024Q4 to a +$4.0M source in 2025Q4, appear to temporarily distort the operating cash flow figure relative to the core business performance.
These volatile working capital movements suggest inconsistent inventory or receivables management during the early commercial launch phase, creating noise in the cash flow profile. The net impact over the last ten quarters is a cumulative drain, but individual quarters can either amplify or partially mask the true operating cash generation. Investors should monitor if this volatility normalizes as the commercial operations mature.
Stock-Based Compensation Clouds True Cash Cost
Stock-based compensation averaged over $6 million per quarter in 2026, representing a significant non-cash add-back that inflates the reported operating cash flow figure relative to the economic cost of labor.
While SBC is excluded from GAAP operating cash flow, it represents a real cost to shareholders through dilution. Excluding the SBC add-back would reveal a much deeper underlying cash consumption for operations. This adjustment is critical for assessing the true cash intensity of the company's commercial launch, as the reported operating cash flow understates the true economic resources being consumed.
Cumulative Losses Far Exceed Cash Burn
Over the ten quarters presented, cumulative net losses total approximately -$586 million, while cumulative operating cash flow is roughly -$492 million, indicating the cash burn has been somewhat less severe than the accounting losses suggest.
The divergence is primarily explained by substantial non-cash charges, especially SBC, which cumulatively add back over $60 million to the cash flow figure. This indicates that a meaningful portion of the reported net loss is a non-cash accounting expense. However, the sheer scale of both figures underscores the massive capital investment required to fund the company's pre-profit growth stage.