Free cash flow remains volatile due to seasonal working capital swings, evidenced by a $57.2 million outflow in 2025Q1 and a capital expenditure-to-revenue ratio that reached 9.0% in 2026Q1.
| Cash from Operations | 50.59M | 51.43M | 61.31M | 116.37M | 32.31M | 33.69M | 63.16M | 35.66M |
| Operating CF Margin % | - | 9.42% | 12.06% | 20.54% | 4.64% | 5.34% | 15.66% | 11.21% |
| Operating CF Growth % | 87.54% | -16.11% | -47.32% | 260.18% | -4.1% | -46.66% | 77.14% | - |
| Net Income | 8.55M | 11.12M | -17.86M | -2.39M | -5.69M | -62.35M | 15.98M | 7.46M |
| Depreciation & Amortization | 52.02M | 51.35M | 44.45M | 40.75M | 38.17M | 32.23M | 25.36M | 21.66M |
| Stock-Based Compensation | 8.38M | 9.25M | 7.39M | 18.8M | 50.63M | 128.78M | 1.83M | 808K |
| Deferred Taxes | 2.4M | 2.4M | -1.68M | -17.19M | -3.8M | -12.03M | -4.21M | -10.23M |
| Other Non-Cash Items | -60.68M | 6.61M | 18.48M | 17.1M | 26.59M | 1.84M | 3.14M | 10.6M |
| Working Capital Changes | 39.92M | -29.3M | 10.53M | 59.29M | -73.59M | -54.78M | 21.05M | 5.36M |
| Change in Receivables | -9.77M | -17.44M | -2.38M | 14.37M | 8.99M | -26.02M | 5.27M | -7.1M |
| Change in Inventory | 2.77M | 2.84M | 22.7M | 68.19M | -57.03M | -39.66M | -17.02M | 12.96M |
| Change in Payables | 1.24M | 5.8M | -4.04M | -8.51M | -12.36M | 10.68M | 9.78M | -2.28M |
| Cash from Investing | -46.83M | -30.32M | -84.64M | -31.73M | -45.02M | -108.2M | -115.81M | -27.08M |
| Capital Expenditures | -32.43M | -25.39M | -20.12M | -33.19M | -39.68M | -24.98M | -16.26M | -8.16M |
| CapEx % of Revenue | 5.88% | 4.65% | 3.96% | 5.86% | 5.7% | 3.96% | 4.03% | 2.57% |
| Acquisitions | -14.4M | -4.93M | -64.53M | 0 | -5.36M | -83.27M | -100.12M | -20.21M |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 1.46M | 24K | 35K | 579K | 1.3M |
| Cash from Financing | -1.06M | -6.97M | -22.02M | -13.88M | 3.77M | 60.02M | 54.3M | 16.55M |
| Debt Issued (Net) | -24.8M | -4.07M | -22.02M | -13.88M | 33.68M | 53.67M | -4.04M | 16.5M |
| Equity Issued (Net) | 2.31M | 0 | 0 | 0 | -280.7M | 117.63M | 64.97M | 50K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | -110.03M | 0 | -200K |
| Share Repurchases | 2.31M | 0 | 0 | 0 | -280.7M | -281.64M | -582K | -200K |
| Other Financing | 21.43M | -2.9M | 0 | 0 | 250.8M | -1.25M | -6.62M | 200K |
| Net Change in Cash | 3.52M | 14.64M | -46.37M | 70.14M | -11.33M | -15.36M | 2.65M | 24.17M |
| Free Cash Flow | 18.16M | 26.05M | 41.19M | 83.18M | -7.38M | 8.71M | 46.9M | 27.49M |
| FCF Margin % | 3.29% | 4.77% | 8.1% | 14.68% | -1.06% | 1.38% | 11.63% | 8.65% |
| FCF Growth % | -40.88% | -36.77% | -50.48% | 1227.86% | -184.62% | -81.42% | 70.59% | - |
| FCF per Share | 0.16 | 0.22 | 0.36 | 0.74 | -0.07 | 0.08 | 0.39 | 0.23 |
| FCF Conversion (FCF/Net Income) | 2.12x | 4.62x | -3.43x | -48.73x | -5.67x | -0.54x | 3.95x | 4.78x |
| Interest Paid | -6.27M | 0 | 24.89M | 25.75M | 12.62M | 17.37M | 15.63M | 19.49M |
| Taxes Paid | -344K | 0 | 15.47M | 6.99M | 20.31M | 20.05M | 14.81M | 168K |
High cyclical demand sensitivity
Based on reported financial statements, the relationship between net income and operating cash flow is highly volatile, with OCF/NI ratios swinging from 5.59 in 2026Q1 to -1.61 in 2025Q4, suggesting that accrual-based accounting significantly masks the underlying cash-generating reality of the company's manufacturing operations.
The extreme variance in the conversion ratio indicates that net income is a poor proxy for cash performance due to the heavy impact of seasonal working capital swings. Investors should monitor whether this divergence persists, as it may suggest that reported earnings are not capturing the full cash cost of maintaining the company's specialized fiberglass manufacturing footprint.
As reported in quarterly filings, Latham Group's free cash flow trajectory is characterized by sharp seasonal contractions, with FCF margins plummeting to -49.6% in 2026Q1, illustrating the company's struggle to maintain positive cash flow outside of the peak summer installation season in North America.
The recurring negative FCF during off-peak quarters highlights the high fixed-cost burden associated with maintaining a national logistics and manufacturing network. This trajectory suggests that the company's cash position is highly sensitive to the timing of dealer orders, which may be pulled forward or delayed based on broader housing market conditions.
According to recent SEC filings, the company's capital expenditure as a percentage of revenue reached 9.0% in 2026Q1, a significant increase from the 3.1% observed in 2025Q1, indicating that the maintenance of fiberglass molds and logistics infrastructure requires consistent, non-discretionary reinvestment regardless of current demand levels.
This elevated capital intensity appears to be a structural requirement for maintaining the company's competitive moat in fiberglass shell manufacturing. The trend warrants further investigation to determine if these expenditures are primarily for growth or if they represent the ongoing cost of replacing aging molds and logistics assets.
Based on the provided cash flow data, working capital changes are the primary driver of quarterly cash flow volatility, with a $57.2 million outflow in 2025Q1 followed by a $23.8 million inflow in 2025Q3, reflecting the company's reliance on seasonal inventory build-ups and subsequent dealer collections.
The magnitude of these working capital swings suggests that the company's liquidity is heavily dependent on the efficiency of its dealer network's inventory management. Investors should monitor whether these cycles are lengthening, as any delay in collections could place significant pressure on the company's cash reserves during the off-season.
Analysis of the cash flow statement reveals that stock-based compensation consistently adds back millions to operating cash flow, with $3.9 million recorded in 2025Q4, which may artificially inflate the perceived cash-generating capacity of the business during periods of operational weakness.
By treating SBC as a non-cash add-back, the reported operating cash flow may overstate the actual cash available for debt service or capital reinvestment. This practice warrants further investigation to ensure that the company's cash flow metrics are not being flattered by accounting adjustments that do not reflect the true economic cost of employee compensation.
Quick answers to the most common questions about buying SWIM stock.
Latham Group, Inc. (SWIM) generated $51.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Latham Group, Inc. (SWIM) generated $26.0M 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.
Latham Group, Inc. (SWIM) spent $25.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.