Talos Energy Inc. (TALO) Cash Flow Statement

The operating cash flow to net income ratio swings from -4.01 to 23.37 across the ten quarters, which signals that accruals, impairments, and non-cash charges are dominating reported earnings rather than cash conversion being a stable characteristic. Large depletion and depreciation add-backs of roughly $265M to $311M per quarter mean that operating cash flow is largely a function of production volume and realized prices. Investors should monitor whether the positive operating cash flow persists through commodity price cycles, since the current gap may reflect the non-cash nature of heavy amortization rather than durable earnings quality.

Free cash flow fell to $21.6M in 2026Q1 despite $174.0M of operating cash flow, largely because capital expenditure of $152.4M consumed most of the operating inflow. The swing between quarters suggests that capital spending timing, rather than steady operating performance, is a major driver of reported free cash flow. Investors should treat single-quarter free cash flow as an unreliable indicator and focus on multi-quarter averages instead.

Capex intensity relative to revenue fluctuates between roughly 0% and 32%, with several quarters showing negligible capital outlays against consistently high depletion charges. The mismatch suggests that spending is concentrated in project timing windows rather than tracking a steady maintenance cadence. Analysts should evaluate whether the near-zero capex quarters reflect deferred maintenance, which would flatter near-term free cash flow, or simply a lull between development programs.

The consistent sign reversals in working capital suggest receivable and payable timing, rather than a structural shift, is responsible for much of the quarterly variance. Because these swings are comparable in size to the free cash flow itself, reported quarterly cash generation should be normalized before drawing conclusions. Investors should monitor whether working capital outflows recur in strong pricing periods, which could signal collection pressure.