Free cash flow margins have deteriorated to -90.3% in 2026Q1, reflecting the heavy 16.4% of revenue allocated to capital expenditures for consignment instrument trays.
| Cash from Operations | -34.49M | -28.61M | -14.14M | -13.14M |
| Operating CF Margin % | - | -60.47% | -44.72% | -68.2% |
| Operating CF Growth % | -90.8% | -102.31% | -7.6% | - |
| Net Income | -44.08M | -40.36M | -15.62M | -12.65M |
| Depreciation & Amortization | 3.67M | 3.21M | 2.2M | 1.64M |
| Stock-Based Compensation | 1.59M | 996K | 754K | 451K |
| Deferred Taxes | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 1.8M | 7.54M | -437K | 2.18M |
| Working Capital Changes | 2.51M | 0 | -1.04M | -4.76M |
| Change in Receivables | -4.23M | -3.3M | -575K | -2.69M |
| Change in Inventory | -8.72M | -7.64M | -4.03M | -2.41M |
| Change in Payables | 2.27M | 3.37M | 3.12M | -737K |
| Cash from Investing | -85.65M | -95.6M | 13.96M | -28.97M |
| Capital Expenditures | -9.3M | -7.41M | -4.01M | -2.75M |
| CapEx % of Revenue | 17.26% | 15.66% | 12.7% | 14.26% |
| Acquisitions | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 |
| Cash from Financing | 125.26M | 144.96M | 66K | 44.73M |
| Debt Issued (Net) | 0 | 0 | 0 | 10M |
| Equity Issued (Net) | -19.63M | 0 | 66K | 34.88M |
| Dividends Paid | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 |
| Other Financing | 144.9M | 144.96M | 0 | -149K |
| Net Change in Cash | 5.12M | 20.75M | -113K | 2.61M |
| Free Cash Flow | -43.79M | -36.02M | -18.16M | -15.89M |
| FCF Margin % | -81.26% | -76.12% | -57.42% | -82.45% |
| FCF Growth % | - | -98.37% | -14.26% | - |
| FCF per Share | -2.12 | -0.46 | -0.91 | -0.80 |
| FCF Conversion (FCF/Net Income) | 0.99x | 0.71x | 0.91x | 1.04x |
| Interest Paid | -431K | 0 | 1.78M | 901K |
| Taxes Paid | 0 | 0 | 0 | 0 |
Unsustainable cash burn rate
According to recent financial disclosures, Shoulder Innovations exhibits a persistent disconnect between net losses and operating cash flow, with the 2026Q1 OCF/NI ratio of 1.47 indicating that cash outflows are significantly outpacing the accounting losses reported on the income statement during this aggressive commercial expansion phase.
The divergence between net income and operating cash flow suggests that the company is consuming cash at a rate faster than its accounting losses imply, likely due to heavy investment in working capital and inventory. Investors should monitor this trend, as the inability to align cash generation with earnings growth may necessitate further dilutive financing.
As reported in quarterly filings, Shoulder Innovations' free cash flow margin deteriorated to -90.3% in 2026Q1, reflecting a deepening reliance on external capital to fund operations as the company prioritizes market share acquisition over the achievement of self-sustaining cash flow generation in the competitive orthopedic space.
The consistent negative trajectory of free cash flow, which reached -$15.1M in the most recent quarter, highlights the high cost of scaling a direct sales force and supporting surgical instrument sets. This trend appears to indicate that the company is currently in a high-burn phase that will require significant operational efficiency gains to reverse.
Based on the provided data, Shoulder Innovations' capital expenditure as a percentage of revenue reached 16.4% in 2026Q1, underscoring the heavy asset-intensity required to maintain the consignment inventory and instrument trays necessary to support the company's rapid adoption among orthopedic surgeons in the US market.
The high level of capital intensity is a direct consequence of the company's business model, which requires significant upfront investment in surgical hardware to facilitate product usage. This suggests that future revenue growth will remain tethered to continued capital deployment, potentially limiting the company's ability to reach cash flow break-even in the near term.
Analysis of the cash flow statements reveals that working capital changes have become a significant variable in the company's liquidity profile, with a $2.3M outflow in 2025Q3 highlighting the cash-intensive nature of managing consignment inventory and the logistical requirements of the InSet surgical system rollout.
The volatility in working capital changes suggests that the company's cash position is highly sensitive to the timing of inventory deployments and hospital procurement cycles. Investors should monitor whether these outflows stabilize as the installed base of surgeons matures and the need for new instrument sets potentially moderates.
Quick answers to the most common questions about buying SI stock.
Shoulder Innovations, Inc. (SI) generated $-28.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Shoulder Innovations, Inc. (SI) reported negative free cash flow of $36.0M in 2025, indicating capital requirements exceeded cash from operations.
Shoulder Innovations, Inc. (SI) spent $7.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.