Cash conversion remains inconsistent, as evidenced by the 2026Q4 divergence between a $118.7M net loss and a $50.3M positive operating cash flow.
| Cash from Operations | 6.73M | -106.38M | -106.38M |
| Operating CF Margin % | -6.23% | -164.91% | -164.91% |
| Operating CF Growth % | 106.33% | 0% | - |
| Net Income | -126.23M | 63.6M | 63.6M |
| Depreciation & Amortization | 0 | 0 | 0 |
| Stock-Based Compensation | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 |
| Other Non-Cash Items | 135.56M | -167.57M | -167.57M |
| Working Capital Changes | -2.61M | -2.4M | -2.4M |
| Change in Receivables | -21.69K | -70K | -70K |
| Change in Inventory | 0 | 0 | 0 |
| Change in Payables | 0 | 0 | 0 |
| Cash from Investing | 0 | 0 | 0 |
| Capital Expenditures | 0 | 0 | 0 |
| CapEx % of Revenue | - | - | - |
| Acquisitions | - | - | - |
| Investments | 0 | 0 | 298.12K |
| Other Investing | 0 | 0 | 0 |
| Cash from Financing | -10.87M | 85.46M | 85.46M |
| Debt Issued (Net) | - | - | - |
| Equity Issued (Net) | 1.18M | 1000K | 85.46M |
| Dividends Paid | -57.83M | 0 | -42 |
| Share Repurchases | 0 | -42.04K | -42.04K |
| Other Financing | 55.78M | 0 | 42 |
| Net Change in Cash | -4.14M | -20.92M | -20.92M |
| Free Cash Flow | 6.73M | -106.38M | -106.38M |
| FCF Margin % | -6.23% | -164.91% | -164.91% |
| FCF Growth % | 106.33% | 0% | - |
| FCF per Share | 0.33 | -5.24 | -5.24 |
| FCF Conversion (FCF/Net Income) | -0.05x | -1.67x | -1.67x |
| Interest Paid | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 |
Mark-to-market portfolio volatility
As reported in recent financial statements, the relationship between net income and operating cash flow is highly erratic, evidenced by a 2026Q4 net loss of $118.7M contrasted against a positive operating cash flow of $50.3M, suggesting a significant disconnect between accounting results and actual cash generation.
The extreme divergence between net income and operating cash flow suggests that the fund's reported earnings are heavily influenced by non-cash mark-to-market adjustments rather than core operational performance. Investors should monitor this gap closely, as it implies that the fund's ability to generate cash is not accurately reflected in its headline profitability metrics.
Based on the provided cash flow data, free cash flow trajectory has been highly unstable, swinging from a negative $20.8B in 2026Q1 to a positive $50.3M in 2026Q4, which indicates that the fund's cash-generating capacity remains extremely sensitive to underlying portfolio valuation shifts.
The erratic nature of free cash flow suggests that the fund may struggle to maintain consistent dividend distributions without relying on capital recycling or external financing. This volatility warrants further investigation into whether the current cash flow levels are sustainable or merely a byproduct of temporary market fluctuations.
According to recent SEC filings, working capital changes have fluctuated significantly, including a notable $318.4M outflow in 2026Q1, which suggests that the fund's cash position is subject to substantial, non-linear adjustments that complicate the assessment of its underlying liquidity and operational efficiency.
These large swings in working capital appear to be driven by the timing of investment settlements rather than traditional operational cycles. Such movements may indicate that the fund's liquidity is highly dependent on the specific timing of CLO tranche cash distributions, which may not always align with the fund's immediate cash needs.
As reported in financial statements, the fund's dividend payments, such as the $29.0M distributed in 2026Q4, frequently appear to be disconnected from the underlying cash flow volatility, suggesting that management may be prioritizing shareholder returns despite significant fluctuations in the fund's core cash-generating ability.
The aggressive dividend policy relative to the erratic cash flow profile may indicate a reliance on balance sheet liquidity to sustain payouts. Investors should monitor whether this deployment strategy remains viable if the underlying credit portfolio continues to experience mark-to-market pressure and reduced cash distributions.
Quick answers to the most common questions about buying SPMC stock.
Sound Point Meridian Capital Inc (SPMC) generated $6.7M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Sound Point Meridian Capital Inc (SPMC) generated $6.7M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Sound Point Meridian Capital Inc (SPMC) spent $0.0M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Sound Point Meridian Capital Inc (SPMC) returned $57.8M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.