Free cash flow turned negative at -$129M in 2026Q2 (FCF margin -5.8%) as working capital consumed $365M, while buybacks of $355M and acquisitions of $676M strained cash despite no dividends.
Solventum Corporation (SOLV) cash flow statement — 5-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 |
|---|
| Cash from Operations | 310M | 369M | 1.19B | 1.92B | 1.68B | 2.2B |
| Operating CF Margin % | - | 4.43% | 14.36% | 23.36% | 20.65% | 26.95% |
| Operating CF Growth % | -641.13% | -68.86% | -38.12% | 14.06% | -23.75% | - |
| Net Income | 156M | 1.56B | 479M | 1.35B | 1.34B | 1.46B |
| Depreciation & Amortization | 385M | 489M | 555M | 561M | 578M | 597M |
| Stock-Based Compensation | 126M | 161M | 112M | 39M | 37M | 38M |
| Deferred Taxes | -161M | -120M | -155M | -142M | -141M | -34M |
| Other Non-Cash Items | -190M | -1.6B | 34M | -15M | 64M | 74M |
| Working Capital Changes | -6M | -119M | 160M | 126M | -202M | 67M |
| Change in Receivables | -335M | 78M | 276M | -129M | -32M | -1M |
| Change in Inventory | -47M | -139M | -132M | 23M | -82M | -136M |
| Change in Payables | 141M | 104M | 266M | 105M | 25M | 68M |
| Cash from Investing | -989M | 2.8B | -380M | -230M | -253M | -278M |
| Capital Expenditures | -310M | -379M | -380M | -290M | -251M | -277M |
| CapEx % of Revenue | 3.8% | 4.55% | 4.6% | 3.54% | 3.09% | 3.39% |
| Acquisitions | -676M | -696M | 0 | 60M | 0 | 0 |
| Investments | - | - | - | - | - | - |
| Other Investing | -3M | 3.87B | 0 | 0 | -2M | -1M |
| Cash from Financing | -516M | -3.06B | -240M | -1.55B | -1.46B | -1.96B |
| Debt Issued (Net) | -54M | -3.07B | 8B | 0 | 0 | 0 |
| Equity Issued (Net) | -355M | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -403M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -107M | 13M | -8.24B | -1.55B | -1.46B | -1.96B |
| Net Change in Cash | -1.19B | 116M | 568M | 133M | -30M | -33M |
| Free Cash Flow | 0 | -10M | 805M | 1.63B | 1.43B | 1.93B |
| FCF Margin % | 0% | -0.12% | 9.75% | 19.82% | 17.56% | 23.56% |
| FCF Growth % | -100% | -101.24% | -50.46% | 13.8% | -25.82% | - |
| FCF per Share | 0.00 | -0.06 | 4.63 | 9.41 | 8.28 | 11.16 |
| FCF Conversion (FCF/Net Income) | 0.00x | 0.24x | 2.47x | 1.42x | 1.25x | 1.51x |
| Interest Paid | 0 | 0 | 287M | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 244M | 0 | 0 | 0 |
Quick answers to the most common questions about buying SOLV stock.
Solventum Corporation (SOLV) generated $369.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Solventum Corporation (SOLV) reported negative free cash flow of $10.0M in 2025, indicating capital requirements exceeded cash from operations.
Solventum Corporation (SOLV) spent $379.0M 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
Working capital drain and buybacks
Metrics are mathematically derived from official filings.
Earnings Quality Deteriorates Sharply
Operating cash flow covered only 41% of net income in 2026Q2, down from 399% in 2024Q2, as reported in financial statements, signaling a marked decline in earnings quality.
The OCF/NI ratio has swung wildly, from 7.06 in 2024Q4 to -14.54 in 2026Q1, indicating that reported earnings are increasingly decoupled from cash generation. The recent quarters show net income positive but operating cash flow negative or minimal, suggesting accruals and non-cash items are inflating earnings. Investors should monitor whether this gap persists, as it may indicate aggressive revenue recognition or working capital mismanagement.
Free Cash Flow Turns Negative
Free cash flow swung from a positive $340M in 2024Q1 to a negative $129M in 2026Q2, with FCF margin collapsing from 16.9% to -5.8%, based on reported figures.
The FCF trajectory has deteriorated significantly, with the last four quarters averaging negative FCF, except for a small positive in 2025Q4. This contrasts with the prior year's robust positive FCF, indicating a structural shift in cash generation. The negative FCF, combined with rising capex, suggests that the company is investing heavily but not yet seeing cash returns, which may pressure liquidity if sustained.
Capital Intensity Rises Amidst Stagnant Revenue
Capital expenditure as a percentage of revenue climbed from 2.8% in 2024Q2 to 7.6% in 2026Q2, as per SEC filings, indicating a strategic pivot toward growth investments.
Capex has increased both in absolute terms and relative to revenue, with the latest quarter showing $167M in capex, the highest in the period. This suggests management is prioritizing expansion or modernization, but given flat revenue, the return on these investments is not yet evident. The elevated capex, coupled with negative FCF, implies that the company is betting on future growth, but investors should watch for signs of overinvestment.
Working Capital Drains Cash Flow
Working capital changes consumed $365M in 2026Q2 and $360M in 2026Q1, as reported in financial statements, reversing the positive contributions seen in early 2024.
The working capital swings are the primary driver of the cash flow deterioration, with large negative changes in the last two quarters. This may indicate inventory build-up, slower collections, or aggressive payables management, but the exact composition is not disclosed. The pattern suggests that the company is funding growth through working capital, which is unsustainable if it continues, and warrants close monitoring of days sales outstanding and inventory turns.
Buybacks and Acquisitions Strain Cash
Solventum deployed $355M on buybacks in 2026Q2 and $676M on acquisitions in 2025Q4, as per cash flow statements, while paying no dividends, indicating a shift toward shareholder returns and M&A.
The capital deployment strategy has shifted from zero buybacks in 2024 to significant repurchases in 2026, alongside a large acquisition in 2025Q4. These outflows, combined with negative operating cash flow, have exacerbated the cash burn. While buybacks may signal confidence, they are occurring at a time when internal cash generation is weak, which could strain the balance sheet if the trend continues.
Cumulative Earnings Outpace Cash Generation
Over the last ten quarters, cumulative net income of $2.1B exceeds cumulative operating cash flow of $1.4B, as calculated from reported data, indicating a persistent gap between earnings and cash.
The cumulative gap of approximately $700M suggests that earnings have not translated into cash, likely due to working capital outflows and other non-cash adjustments. This divergence raises questions about the sustainability of reported profitability and may indicate that the company is relying on accruals to boost earnings. Investors should assess whether this gap narrows in future quarters, as a persistent divergence could signal underlying operational issues.
What Could Invalidate the Base Case
The cash flow statement obscures the impact of stock-based compensation, which totaled $89M in 2026Q2, as reported in financial statements, potentially overstating operating cash flow.
Stock-based compensation is added back to operating cash flow, but it is a non-cash expense that dilutes shareholders. The large SBC figures, especially in 2026Q2, may inflate reported operating cash flow, masking the true cash generation. Additionally, the acquisition in 2025Q4 and buybacks in 2026Q2 are not fully reflected in operating cash flow, and the working capital swings could be timing-related. Investors should consider these factors when evaluating the sustainability of cash flows.