The firm exhibits a structural cash burn with an OCF/NI ratio of 0.81 in 2025Q4, reflecting significant non-cash stock-based compensation expenses of $3.4 million.
| Cash from Operations | -82.18M | -70.02M | -67.39M | -49.11M | -41.83M | -29.81M | -66.22M | -18.07M |
| Operating CF Margin % | - | - | - | - | -4182.7% | - | - | - |
| Operating CF Growth % | -17.37% | -3.9% | -37.23% | -17.41% | -40.32% | 54.99% | -266.45% | - |
| Net Income | -96.21M | -88.85M | -90.21M | -60.34M | -50.16M | -40.57M | -68.82M | -18.02M |
| Depreciation & Amortization | 501K | 896K | 881K | 1.03M | 512K | 394K | 195K | 65K |
| Stock-Based Compensation | 13.4M | 15.63M | 25.54M | 10.77M | 8.15M | 1.69M | 668K | 234K |
| Deferred Taxes | 0 | 23K | 141K | 392K | 219K | 693K | -94K | 307K |
| Other Non-Cash Items | 453K | -2.09M | -5.21M | 81K | 879K | 2.92M | -40K | -307K |
| Working Capital Changes | -321K | 4.38M | 1.48M | -1.04M | -1.43M | 5.06M | 1.87M | -352K |
| Change in Receivables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | -512K | -367K | 1.15M | -722K | 1.73M | -1.15M | 722K | 488K |
| Cash from Investing | -298.04M | -12.41M | -37.99M | -22.27M | -119.7M | 6.69M | -3.86M | -4.78M |
| Capital Expenditures | 0 | -42K | -52K | -275K | -340K | -584K | -900K | -244K |
| CapEx % of Revenue | - | - | - | - | 34% | - | - | - |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 12.04M |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -4.53K |
| Cash from Financing | 743.51M | 164M | 41.95M | 167.09M | 134.39M | 85.52M | 62K | 99.76M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | -12.88M | 16.88M | 58K | 58K |
| Equity Issued (Net) | 743.75M | 162.31M | 41.61M | 167.25M | 136.36M | 69.38M | 0 | 87.65M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -235K | 1.68M | 340K | -158K | 10.91M | -738K | 4K | 12.05M |
| Net Change in Cash | 363.31M | 81.51M | -63.31M | 95.54M | -27.16M | 62.48M | -70.15M | 77.02M |
| Free Cash Flow | -82.18M | -70.06M | -67.44M | -49.38M | -42.17M | -30.39M | -67.12M | -18.32M |
| FCF Margin % | - | - | - | - | -4216.7% | - | - | - |
| FCF Growth % | -17.3% | -3.88% | -36.57% | -17.12% | -38.74% | 54.72% | -266.49% | - |
| FCF per Share | -0.88 | -0.88 | -0.95 | -1.37 | -1.67 | -1.21 | -2.67 | -0.76 |
| FCF Conversion (FCF/Net Income) | 0.85x | 0.79x | 0.75x | 0.81x | 0.83x | 1.02x | 0.96x | 1.02x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 218K | 60K | 28K | 3K | 238K | 178K | 72K | 0 |
Clinical trial execution risk
As reported in quarterly financial statements, Terns Pharmaceuticals consistently exhibits an OCF/NI ratio below 1.0, with the 2025Q4 figure of 0.81 highlighting that the company's cash burn is structurally decoupled from its reported net losses due to significant non-cash stock-based compensation adjustments.
The persistent gap between net income and operating cash flow suggests that the company's accounting losses are partially mitigated by non-cash expenses, yet the underlying cash drain remains substantial. Investors should monitor this ratio as a proxy for the true cost of operations, as the reliance on equity-based compensation may mask the actual cash intensity of the clinical development pipeline.
Based on the provided cash flow data, Terns Pharmaceuticals maintains a consistent negative free cash flow trajectory, with quarterly outflows averaging approximately $19 million throughout 2025, indicating that the firm remains in a deep pre-revenue investment phase without any offsetting cash generation from operations.
The lack of positive free cash flow is expected for a clinical-stage biotech, but the stability of these outflows suggests a high fixed-cost burden associated with ongoing trials. This trajectory implies that the company's survival is entirely dependent on its current cash reserves and the ability to access capital markets before the runway is exhausted.
According to recent SEC filings, Terns Pharmaceuticals experienced significant working capital fluctuations, including a $4.3 million outflow in 2025Q1 followed by a $548,000 inflow in 2025Q4, which suggests that timing differences in clinical trial vendor payments create periodic, albeit manageable, pressure on the company's cash position.
These swings in working capital appear to be driven by the episodic nature of clinical research organization (CRO) invoicing rather than fundamental shifts in operational efficiency. While these movements are currently secondary to the primary R&D burn, they warrant monitoring as they can temporarily accelerate the depletion of the company's cash reserves.
As indicated by the financial data, stock-based compensation (SBC) has been a recurring non-cash expense, reaching $3.4 million in 2025Q4, which effectively reduces the reported net loss while simultaneously creating potential future dilution for shareholders as the company continues to fund its operations through equity-based incentives.
The consistent use of SBC suggests that management is prioritizing cash preservation by utilizing equity to attract and retain talent. However, this practice obscures the true economic cost of the company's research activities, and investors should adjust their burn rate models to account for the eventual dilutive impact of these grants.
Quick answers to the most common questions about buying TERN stock.
Terns Pharmaceuticals, Inc. (TERN) generated $-82.2M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Terns Pharmaceuticals, Inc. (TERN) reported negative free cash flow of $82.2M in 2025, indicating capital requirements exceeded cash from operations.
Terns Pharmaceuticals, Inc. (TERN) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.