SPX Technologies, Inc. (SPXC) Cash Flow Statement

The wide quarterly swings in OCF/NI, from -0.96 to 2.96, suggest that reported net income is not a reliable proxy for cash generation in any given quarter. The negative working capital changes in 2026Q2 (-$70.7M) and 2025Q1 (-$50.9M) appear to be the primary drivers, likely reflecting timing of receivables and payables. Investors should monitor whether these swings smooth out over longer periods, as the cumulative conversion may be more stable than quarterly figures imply.

The FCF trajectory is highly erratic, with negative FCF in 2026Q2 and 2025Q1, but strong positive FCF in other quarters. The large acquisition-related cash outflows (e.g., -$439.3M in 2026Q2, -$304.1M in 2025Q1) appear to be the primary cause, as CapEx remains modest. Excluding acquisition effects, underlying FCF generation seems solid, but the reported figures are distorted by deal timing. This suggests that investors should adjust for M&A to assess organic cash generation.

SPXC's capital intensity is low, with CapEx/Revenue typically in the low single digits, except for a spike in 2026Q1. This suggests that the company does not require heavy reinvestment to sustain operations, which is consistent with a construction materials business that may rely more on working capital and acquisitions for growth. The low CapEx also implies that depreciation is not a major cash drag, and free cash flow conversion from operating income should be high, barring working capital swings.

The working capital line is the most volatile component of operating cash flow, with large negative changes in 2026Q2, 2025Q1, and 2024Q1, and large positive changes in 2026Q1 and 2024Q4. This pattern suggests that SPXC's cash conversion cycle is subject to significant timing effects, possibly due to project-based revenue or seasonal factors. While the company appears to manage its working capital effectively over the long term, the quarterly swings make it difficult to assess true cash generation without normalizing for these changes.

The cash flow statement shows substantial net cash outflows for acquisitions, totaling roughly $1.18B over the period, while dividends and buybacks are negligible. This suggests that management is prioritizing inorganic growth over returning capital to shareholders. The heavy acquisition activity may explain the volatile FCF and could increase integration risk. Investors should assess whether these acquisitions are generating returns above the cost of capital, as the income statement shows strong growth but the cash flow impact is lumpy.

While cumulative OCF ($739.9M) actually exceeds cumulative net income ($590.4M) over the period, the quarterly divergence is stark, with OCF/NI ranging from -0.96 to 2.96. This suggests that earnings quality is generally sound, but the timing of working capital and acquisition-related items creates significant noise. The positive cumulative gap indicates that, over time, cash conversion is strong, but investors should be cautious about relying on any single quarter's OCF as a measure of performance.