Redwire Corp (RDW) Cash Flow Statement

The gap between net income and operating cash flow is heavily influenced by stock-based compensation, which reached $50.6M in 2026Q2, nearly offsetting the reported net loss. This suggests that while reported losses are large, the actual cash outflow is even more severe when excluding non-cash charges. Investors should monitor whether the company can convert its revenue growth into positive operating cash flow, as the current trend indicates a deteriorating cash conversion quality.

The FCF trajectory shows no sign of improvement, with cumulative FCF over the last five quarters at -$252.7M, far exceeding the cumulative net loss of -$343.2M. This indicates that the company is consuming cash at an accelerating rate, likely due to acquisition-related costs and working capital demands. The negative FCF margin, which is worse than peers like LUNR (-40.1%), suggests that Redwire's growth is not yet translating into cash generation, a critical concern for investors.

CapEx has been relatively modest, with the highest quarterly spend at $13.3M in 2026Q2, but this is still below the level needed to sustain a high-growth aerospace and defense business. The low CapEx/Revenue ratio suggests that the company is relying on acquisitions rather than internal investment to drive growth, which may lead to higher future maintenance capex as assets age. This could pressure cash flow further if the company needs to replace or upgrade its asset base.

The erratic working capital movements, particularly the large negative swings in 2025Q1 and 2026Q2, suggest that Redwire is experiencing difficulties in managing receivables and inventory, possibly due to rapid growth and acquisition integration. These swings have a material impact on cash flow, as evidenced by the $11.1M negative working capital change in 2026Q2, which contributed to the widened operating cash outflow. Investors should monitor whether the company can stabilize its working capital cycle as it scales.

The company's capital deployment strategy is heavily skewed toward acquisitions, with a notable $151.8M outflow in 2025Q2, which likely contributed to the negative FCF and increased leverage. While dividends and buybacks are negligible, the acquisition spree appears to be a primary use of cash, yet the return on these investments is unclear given the persistent operating losses. This raises questions about the sustainability of the growth strategy and whether it will eventually generate positive cash flow.

The cumulative gap between net income and operating cash flow is -$106.1M, suggesting that reported losses are not fully reflecting the cash being consumed, likely due to non-cash charges like SBC and D&A. This divergence may indicate that the company is recognizing expenses faster than cash is being spent, which could be a sign of conservative accounting or, conversely, that future cash outflows will be higher as those accruals reverse. Investors should scrutinize the quality of earnings, as the cash flow statement paints a more severe picture than the income statement.