Liquidity generation remains volatile, with the OCF/NI ratio swinging from -0.18 in 2025Q3 to 2.48 in 2026Q1, largely driven by unpredictable working capital shifts.
| Cash from Operations | 123.59M | 99.41M | 70.35M | 41.48M |
| Operating CF Margin % | - | 3.97% | 3.92% | 3.04% |
| Operating CF Growth % | 49.96% | 41.31% | 69.61% | - |
| Net Income | -141.27M | -156.61M | 67.86M | 41.26M |
| Depreciation & Amortization | 18.17M | 16.8M | 14.81M | 12.1M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 |
| Deferred Taxes | -18.79M | -18.79M | -1.28M | -74K |
| Other Non-Cash Items | 303.51M | 304.57M | 32K | -1.43M |
| Working Capital Changes | -38.03M | -46.56M | -11.07M | -10.39M |
| Change in Receivables | -54.49M | -67.72M | -30.81M | -1.54M |
| Change in Inventory | -56.4M | -29.03M | -73.22M | -30.89M |
| Change in Payables | 78.89M | 62.38M | 86.47M | 28.1M |
| Cash from Investing | -43.8M | -39.77M | -20.44M | -14.5M |
| Capital Expenditures | -24.52M | -20.48M | -20.45M | -14.5M |
| CapEx % of Revenue | 0.9% | 0.82% | 1.14% | 1.06% |
| Acquisitions | -19.29M | -19.29M | 12K | 0 |
| Investments | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 |
| Cash from Financing | 45.45M | 53.71M | -2.9M | 0 |
| Debt Issued (Net) | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | 131.41M | 135.03M | -2.9M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 |
| Share Repurchases | -3.62M | 0 | -2.9M | 0 |
| Other Financing | -85.96M | -81.32M | 0 | 0 |
| Net Change in Cash | 125.44M | 113.43M | 48.38M | 28.05M |
| Free Cash Flow | 99.07M | 78.92M | 49.9M | 26.98M |
| FCF Margin % | 3.62% | 3.16% | 2.78% | 1.97% |
| FCF Growth % | - | 58.17% | 84.95% | - |
| FCF per Share | 0.55 | 0.45 | 0.29 | 0.16 |
| FCF Conversion (FCF/Net Income) | -0.70x | 6.12x | 1.04x | 1.01x |
| Interest Paid | 50K | 0 | 101K | 106K |
| Taxes Paid | 17.41M | 0 | 21.34M | 18.86M |
Inventory-driven cash flow volatility
According to quarterly financial data, the relationship between net income and operating cash flow is highly erratic, evidenced by an OCF/NI ratio that swung from -0.18 in 2025Q3 to 2.48 in 2026Q1, suggesting that accounting earnings are poor proxies for actual liquidity generation.
The extreme variance in the OCF/NI ratio indicates that Pattern's reported net income is heavily influenced by non-cash items or timing differences inherent in its principal-based inventory model. Investors should interpret this as a signal that cash generation is not currently tracking with profitability, likely due to the aggressive working capital requirements of scaling product distribution.
As reported in recent financial statements, free cash flow margins have fluctuated wildly between -0.6% and 8.2% over the last five quarters, indicating that the company's ability to retain cash is highly sensitive to seasonal inventory cycles and marketplace fulfillment demands.
The inconsistency in FCF margins suggests that Pattern's business model struggles to produce predictable cash flow, even during periods of top-line growth. This volatility warrants further investigation into whether the company can achieve sustainable cash conversion as it scales, or if it will remain tethered to the capital-intensive nature of its inventory-heavy operations.
Based on reported figures, working capital changes have been the primary determinant of quarterly cash flow, with a $30.1 million inflow in 2026Q1 contrasting sharply with a $34.2 million outflow in 2025Q4, highlighting the company's reliance on efficient inventory management to maintain liquidity.
The significant quarterly swings in working capital suggest that Pattern's cash position is highly vulnerable to inventory build-ups and the timing of marketplace payouts. This dynamic implies that any disruption in sell-through velocity could rapidly deplete cash reserves, forcing the company to rely on external financing to bridge the gap.
According to recent SEC filings, Pattern maintains a disciplined capital expenditure profile, with CapEx/Revenue ratios consistently hovering around 1%, suggesting that the company is not currently burdened by heavy investments in physical infrastructure despite its role as a global distributor.
While the low capital intensity is a positive indicator for potential scalability, it may also suggest that the company is deferring necessary investments in logistics or technology to preserve cash. Analysts should monitor whether this lean spending profile is sustainable or if it will eventually limit the company's ability to compete with larger, more infrastructure-rich retailers.
Quick answers to the most common questions about buying PTRN stock.
Pattern Group Inc. Series A Common Stock (PTRN) generated $99.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Pattern Group Inc. Series A Common Stock (PTRN) generated $78.9M 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.
Pattern Group Inc. Series A Common Stock (PTRN) spent $20.5M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.