Sarepta Therapeutics, Inc. (SRPT) Cash Flow Statement

The gap between net income and operating cash flow is substantial and inconsistent. In 2026Q1, net income was $331.0M but operating cash flow was -$202.7M, driven by a -$586.3M working capital change, suggesting that reported profitability is not translating into cash generation. Conversely, 2025Q2 saw OCF of $261.3M against net income of $196.9M, with positive working capital contribution, indicating that cash conversion is erratic and may reflect timing of collections and payments rather than underlying operational efficiency.

The FCF trajectory is far from stable, with no clear upward trend. The 2025Q1 trough of -$629.3M was followed by a strong recovery in 2025Q2, but subsequent quarters show renewed weakness, including -$205.8M in 2026Q1. This volatility suggests that Sarepta's cash flows are not yet predictable, likely due to lumpy product sales and significant working capital swings, which investors should monitor as a sign of operational maturity.

The magnitude of working capital changes is outsized relative to revenue, with 2026Q1's -$586.3M change representing a substantial cash outflow. This may indicate aggressive revenue recognition or inventory build-up, but the data suggests that cash flow is heavily influenced by collection cycles and payment terms. The inconsistency across quarters—positive in 2025Q4 and negative in 2026Q1—points to a lack of stable working capital management, which could strain liquidity if not addressed.

CapEx has been modest, averaging around 4-5% of revenue, which is typical for a biotech with outsourced manufacturing. The low capital intensity suggests that Sarepta does not require heavy fixed asset investment to grow, but this also means that cash flow is more sensitive to working capital and operating expenses. The slight increase in CapEx in 2025Q3 and Q4 may indicate investment in capacity, but overall, capital spending is not a major cash drain.

Summing the quarterly operating cash flows yields a negative total, while net income has been positive in several quarters, indicating a persistent gap between accrual-based earnings and cash generation. This divergence may be due to significant working capital outflows, particularly in 2025Q1 and 2026Q1, which have not reversed fully. Investors should question the sustainability of earnings if cash flow does not eventually catch up, as this could signal aggressive revenue recognition or inventory issues.