Cash flow generation is increasingly unstable, evidenced by a free cash flow margin that swung from 41.7% in 2023Q4 to a negative 79.7% in 2025Q4.
| 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 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 2.17B | 2.01B | 1.78B | 1.57B | 1.69B | 1.16B | 790.94M | 823.57M | 720.63M | 515.39M | 552.8M | 978.35M | 1.46B | 1.34B | 921.97M | 760.53M | 497.1M | 436.11M | 678.22M | 630.79M | 467.7M | 409.38M | 237.16M | 204.32M | 141.71M | 127.49M | 92.27M | 40.8M | 45.4M | 43.1M | 24.2M |
| Operating CF Margin % | - | 63.76% | 66.73% | 66.6% | 50.4% | 44.64% | 70.23% | 51.94% | 43.94% | 40.89% | 46.83% | 64.62% | 57.76% | 59.09% | 60.18% | 54.19% | 54.38% | 52.4% | 52.12% | 63.71% | 59.38% | 55.35% | 54.76% | 51.9% | 72.19% | 61.45% | 47.16% | 54.46% | 57.1% | 47.36% | 40.6% |
| Operating CF Growth % | 42.26% | 12.82% | 13.22% | -6.64% | 45.41% | 46.63% | -3.96% | 14.28% | 39.82% | -6.77% | -43.5% | -32.83% | 8.82% | 45.18% | 21.23% | 52.99% | 13.99% | -35.7% | 7.52% | 34.87% | 14.25% | 72.62% | 16.07% | 44.18% | 11.15% | 38.18% | 126.14% | -10.13% | 5.34% | 78.1% | 36.72% |
| Net Income | 130.73M | 648M | 770.29M | 817.88M | 1.11B | 36.23M | -764.61M | -187M | 508.41M | -160.84M | -757.74M | -447.71M | 666.05M | 170.94M | -54.25M | 215.42M | 196.84M | -99.37M | 91.55M | 189.71M | 190.01M | 151.94M | 92.48M | 95.58M | 27.56M | 40.46M | 55.62M | 100K | -8.8M | 23.1M | 10.4M |
| Depreciation & Amortization | 1.37B | 1.21B | 809.3M | 690.48M | 603.78K | 1.71B | 1.36B | 954.32M | 665.31M | 557.04M | 790.75M | 921.01M | 767.53M | 822.87M | 727.88M | 511.1M | 336.14M | 579.41M | 626.01M | 227.6M | 154.52M | 132.76M | 92.22M | 81.96M | 54.43M | 51.35M | 40.13M | 22.6M | 24.9M | 18.4M | 12.7M |
| Stock-Based Compensation | 21.91M | 29M | 25.02M | 20.25M | 18.77M | 18.82M | 15M | 24.32M | 23.91M | 22.7M | 26.9M | 27.47M | 32.69M | 32.35M | 30.18M | 26.82M | 26.74M | 18.77M | 14.81M | 10.1M | 11.42M | 4.19M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 66.74M | 178M | 174.99M | 88.26M | 269.06M | 9.56M | -192.54M | -41.84M | 141.71M | -192.07M | -448.64M | -276.72M | 397.78M | 105.56M | -29.64M | 123.79M | 114.52M | -39.73M | 40.63M | 92.95M | 74.83M | 5.55M | 39.57M | 21.69M | 14.45M | 23.73M | 21.35M | -900K | -5.4M | 10.8M | 4.6M |
| Other Non-Cash Items | 564.97M | -65M | -8.3M | -37.92M | 358.08M | -735.44M | 362.26M | 56.92M | -632.38M | 218.95M | 969.5M | 712.11M | -409.37M | 213.82M | 266.22M | -75.81M | -172.11M | -38.66M | -40.52M | 60.03M | 43.19M | 130.83M | 34.99M | 7.46M | 12.33M | 13.59M | 3.38M | 15.7M | -200K | -100K | 100K |
| Working Capital Changes | 14.56M | 14M | 11.21M | -4.55M | -72.06M | 117.41M | 11.59M | 16.85M | 13.67M | 69.61M | -27.95M | 42.2M | 1.88M | -7.01M | -18.42M | -40.79M | -5.03M | 15.69M | -54.27M | 50.41M | -6.28M | -15.88M | -22.1M | -2.37M | 32.93M | -1.63M | -28.21M | 3.3M | 6.1M | -4.9M | -4.9M |
| Change in Receivables | 0 | 30M | -85.53M | -10.19M | 38.55M | -101.05M | 29.1M | -39.56M | -30.15M | 14M | -10.56M | 140.2M | 24.09M | -78.49M | -21.39M | -42M | -47.15M | 46.74M | -14.33M | -6.56M | 22.48M | -39.88M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 23.38M | -50.28M | -23.82M | 20.73M | 43.02M | 7.79M | -1.82M | 98K | 733K | 61.88M | -10.22M | 0 | -1.5M | 26.13M | -17.89M | -6.92M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | -17M | 109.27M | 8.08M | -109.56K | 218.24M | -23.38M | 50.28M | 23.82M | 44.98M | -53.21M | -86.27M | 9.47M | 93.22M | 31.14M | -18.07M | 53.2M | 0 | -12.35M | 40.77M | 5.21M | 25.98M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -1.67B | -1.47B | -3.41B | -1.1B | -880.26M | -667.24M | -555.57M | -1.01B | -587.93M | -201.53M | -1.87B | -1.14B | -2.48B | -1.19B | -1.46B | -1.26B | -361.57M | -304.09M | -672.78M | -803.87M | -724.72M | -339.78M | -247.01M | -196.94M | -180.93M | -159.07M | -112.87M | -22.2M | -37M | -67.5M | -45.2M |
| Capital Expenditures | -1.58B | -1.44B | -1.31B | -1.1B | -879.93M | -678.16M | -555.66M | -1.03B | -1.34B | -978.25M | -2.81B | -1.5B | -2.52B | -1.62B | -1.51B | -1.63B | -668.95M | -379.33M | -827.44M | -820.63M | -725.7M | -270.88M | -268.19M | -200.24M | -184.72M | -170.8M | -65.24M | -40.3M | -58.6M | -81.5M | -27.5M |
| CapEx % of Revenue | 41.63% | 45.59% | 49.06% | 46.51% | 26.3% | 26.1% | 49.34% | 64.72% | 81.48% | 77.61% | 238.37% | 99.18% | 99.91% | 71.3% | 98.79% | 116.37% | 73.18% | 45.58% | 63.59% | 82.88% | 92.13% | 36.63% | 61.92% | 50.86% | 94.1% | 82.33% | 33.34% | 53.8% | 73.7% | 89.56% | 46.14% |
| Acquisitions | -49M | 0 | 0 | 0 | 0 | 10.93M | 92K | 13.06M | 748.51M | 776.72M | 946.06M | 357.94M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 495K | 0 | -73.91M | 2.83M | 23.5M | 1.62M | 0 | -52.08M | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -39.11M | -30M | -2.1B | 657K | -329K | 0 | 0 | 13.06M | 748.51M | 776.72M | 943.06M | 356.95M | 40.6M | 422.24M | 56.27M | 368.18M | 307.38M | 74.23M | 154.66M | 15.98M | 951K | 5.08M | 7.33M | -10.12M | 3.15M | 11.73M | 4.45M | 18.1M | 21.6M | 14M | -17.7M |
| Cash from Financing | -51.83M | -175M | 1.01B | -304.54M | -693.86M | -159.83M | -235.38M | 111.77M | -368.67M | -12.29M | 1.33B | 166.19M | 740.05M | 130.71M | 422.1M | 618.5M | -141.1M | -127.5M | -42.81M | 215.13M | 243.56M | -61.09M | 1.44M | -3.71M | 46.26M | 29.08M | 13.03M | -12.1M | -7.7M | 28.1M | 22.6M |
| Debt Issued (Net) | 140M | -68M | 1.2B | 0 | -584.95M | -151M | -219.5M | 122.5M | -352.92M | -2.36M | 426.35M | 164.5M | 755.99M | 150.19M | 444.64M | 636.24M | -140M | -123.07M | 15M | 231.66M | 338.47M | -37M | 26M | -4.09M | 46.66M | 42M | 9M | -9.7M | -3.2M | -21M | 24M |
| Equity Issued (Net) | -10M | -10M | -82.86M | -225.05M | -54.17M | 2.64M | 1.46M | 3.21M | 3.19M | 2.62M | 0 | 0 | 0 | 0 | -15.81M | 7.33M | 4.35M | 3.11M | -65.31M | -15.9M | -89.31M | -17.71M | -21.71M | 3.53M | 2.39M | -10.13M | 6.8M | -200K | -2.3M | 51.2M | 0 |
| Dividends Paid | -151.11M | -92M | -85.02M | -71.61M | -19.64M | -2.39M | -2.28M | -11.25M | -11.19M | -11.14M | -7.75M | -6.77M | -6.72M | -6.66M | -6.51M | -6.38M | -6.3M | -6.25M | -6.19M | -6.28M | -5.6M | -5.69M | -2.85M | -3.15M | -2.79M | -2.79M | -2.77M | -2.2M | -2.2M | -2.1M | -1.4M |
| Share Repurchases | -13M | -13M | -86.06M | -228.1M | -57.21M | 0 | 0 | 0 | 0 | 0 | 0 | -8.68M | -10.62M | -16.22M | -21.62M | -9.97M | -2.09M | 0 | -77.2M | -25.9M | -123.11M | -28.9M | -35.74M | 0 | 0 | -12.87M | -344K | -500K | -2.5M | 0 | 0 |
| Other Financing | -30.72M | -5M | -19.81M | -7.88M | -35.11M | -9.07M | -15.07M | -2.69M | -7.75M | -1.41M | 908.59M | 8.46M | -9.22M | -12.81M | -225K | -18.69M | 854K | -1.28M | 13.69M | 5.65M | 0 | -693K | 0 | 0 | 0 | 0 | 1K | 0 | 0 | 0 | 0 |
| Net Change in Cash | 448.95M | 368M | -616.16M | 171.17M | 112.28M | 332.71M | 0 | -77.95M | -235.98M | 301.57M | 9.35M | -102K | -282.13M | 276.32M | -113.27M | 114.12M | -5.57M | 4.52M | -37.38M | 42.05M | -13.46M | 8.51M | -8.41M | 3.67M | 7.04M | -2.5M | -7.58M | 6.4M | -7.7M | 28.1M | 22.6M |
| Free Cash Flow | -225.6M | 573M | -1.63B | 475.05M | 806.47M | 481.61M | 235.29M | -202.78M | -615.81M | -462.86M | -2.26B | -523.24M | -1.06B | -276.63M | -591.63M | -872.56M | -171.85M | 56.78M | -149.22M | -189.84M | -258M | 138.5M | -31.03M | 4.08M | -43.01M | -43.31M | 27.03M | 500K | -13.2M | -38.4M | -3.3M |
| FCF Margin % | -5.95% | 18.17% | -61.09% | 20.1% | 24.1% | 18.54% | 20.89% | -12.79% | -37.55% | -36.72% | -191.54% | -34.56% | -42.15% | -12.21% | -38.62% | -62.18% | -18.8% | 6.82% | -11.47% | -19.17% | -32.75% | 18.73% | -7.16% | 1.04% | -21.91% | -20.88% | 13.81% | 0.67% | -16.6% | -42.2% | -5.54% |
| FCF Growth % | 85.02% | 135.11% | -443.5% | -41.09% | 67.45% | 104.69% | 216.03% | 67.07% | -33.05% | 79.53% | -332.1% | 50.77% | -284.19% | 53.24% | 32.2% | -407.73% | -402.68% | 138.05% | 21.4% | 26.42% | -286.28% | 546.36% | -859.93% | 109.49% | 0.69% | -260.26% | 5305.2% | 103.79% | 65.63% | -1063.64% | 34% |
| FCF per Share | -1.96 | 4.98 | -14.12 | 3.98 | 6.50 | 3.89 | 2.07 | -1.80 | -5.43 | -4.15 | -29.53 | -7.73 | -15.62 | -4.07 | -9.08 | -12.91 | -2.66 | 0.91 | -2.36 | -2.93 | -3.91 | 2.07 | -0.46 | 0.06 | -0.76 | -0.76 | 0.48 | 0.01 | -0.30 | -0.90 | -0.09 |
| FCF Conversion (FCF/Net Income) | -1.73x | 3.10x | 2.31x | 1.92x | 1.52x | 32.01x | -1.03x | -4.40x | 1.42x | -3.20x | -0.73x | -2.19x | 2.19x | 7.83x | -17.00x | 3.53x | 2.53x | -4.39x | 7.76x | 3.32x | 2.46x | 2.69x | 2.56x | 2.14x | 5.14x | 3.15x | 1.66x | 497.56x | -5.16x | 1.87x | 2.33x |
| Interest Paid | 244.24M | 0 | 88.39M | 86.95M | 134.24M | 136.61M | 0 | 0 | 150.73M | 164.1M | 0 | 126.99M | 89.14M | 0 | 0 | 0 | 13.34M | 17.88M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 1.05M | 0 | 26.9M | 8.97M | 10.58M | 864K | 0 | 0 | 3M | 5.99M | 0 | 1.63M | 1.94M | 0 | 0 | 0 | 25.58M | 9.86M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Commodity price volatility exposure
According to reported financial statements, SM's operating cash flow to net income ratio reached a volatile -1.91 in 2026Q1, highlighting a significant disconnect between accounting profits and actual cash generation that warrants close scrutiny from investors evaluating the sustainability of the company's core operational cash flows.
The persistent divergence between net income and operating cash flow suggests that non-cash charges and working capital adjustments are heavily distorting the company's reported earnings. Investors should monitor whether this trend reflects structural accounting volatility or an inability to convert operational activity into tangible liquidity.
As indicated by recent quarterly filings, SM's free cash flow margin swung from a peak of 41.7% in 2023Q4 to a negative 79.7% in 2025Q4, illustrating a highly unstable cash trajectory that appears increasingly sensitive to the company's aggressive and lumpy capital expenditure requirements.
The erratic nature of free cash flow generation suggests that the company's capital allocation strategy may be struggling to balance production growth with shareholder returns. This instability implies that the company's ability to self-fund its operations remains vulnerable to even minor shifts in commodity price realizations.
Based on the provided data, SM's capital expenditure to revenue ratio reached an alarming 142.6% in 2025Q4, suggesting that the company is currently reinvesting significantly more than its top-line revenue to maintain or expand its production base in the Midland Basin and South Texas.
Such high capital intensity relative to revenue indicates that the company may be facing diminishing returns on its drilling program or is aggressively front-loading development costs. This level of spending appears unsustainable without a substantial and sustained increase in commodity prices to justify the capital outlay.
Data from recent SEC filings reveals that SM's working capital changes have been highly inconsistent, ranging from a $97.7M outflow in 2024Q1 to a $69.3M inflow in 2025Q2, which suggests that the company's cash conversion cycle is subject to significant and unpredictable operational timing differences.
These fluctuations in working capital may indicate challenges in managing inventory levels or timing of receivables collection in a volatile energy market. Investors should investigate whether these swings are indicative of broader operational inefficiencies or merely the result of seasonal timing in the company's drilling and completion schedule.
Quick answers to the most common questions about buying SM stock.
SM Energy Company (SM) generated $2.01B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
SM Energy Company (SM) generated $573.0M 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.
SM Energy Company (SM) spent $1.44B 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, SM Energy Company (SM) returned $92.0M to shareholders via cash dividends and spent $13.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.