TG Therapeutics, Inc. (TGTX) Cash Flow Statement

The OCF/NI ratio of 2.75 in 2026Q2 suggests that reported net income understates cash generation, but this is largely due to non-cash charges like SBC and D&A. However, the 2025Q3 net income of $390.9M, likely from an out-licensing gain, was not matched by operating cash flow, which was -$23.2M, indicating that the headline earnings quality is distorted by one-time items. Investors should monitor whether operating cash flow can consistently exceed net income as the business scales.

The trajectory shows improving FCF as revenue scales, but the path is highly erratic, with negative quarters interspersed with positive ones. The 2026Q2 FCF margin of 8.7% is the highest in the series, suggesting that the company may be approaching cash flow breakeven, yet the sustainability is uncertain given the reliance on a single product and the potential for increased working capital needs. The gap between net income and FCF in 2025Q3 (net income of $390.9M vs FCF of -$23.2M) highlights the non-cash nature of that gain.

The negligible capex suggests that TGTX does not own significant manufacturing or distribution infrastructure, likely relying on contract manufacturing and outsourcing. This keeps capital intensity low, but it also means that the company's cash flow is more sensitive to operating expenses and working capital swings. The lack of capex may limit the company's ability to control its supply chain, but it also preserves cash for commercial expansion.

The persistent negative working capital changes indicate that TGTX is building receivables and inventory as revenue grows, which is typical for a rapidly scaling biotech. However, the magnitude of these outflows is significant relative to operating cash flow, suggesting that the company may be extending credit to distributors or accumulating inventory ahead of demand. If revenue growth slows, these working capital needs could compress, but for now, they are a major drag on cash flow.

The aggressive buyback program, which began in 2025Q3, suggests management believes the stock is undervalued, but it also consumes cash that could be used for R&D or debt reduction. The company also received a significant upfront payment from the Neuraxpharm licensing deal in 2025Q3, which likely funded these buybacks. Investors should assess whether this capital deployment is prudent given the company's low cash balance of $79M and the need for ongoing investment in the Briumvi launch.

This massive gap is primarily due to the $390.9M non-cash gain in 2025Q3 and the persistent working capital outflows. The cumulative OCF being negative despite positive net income indicates that the company has not yet converted its accounting profits into cash, which is a red flag for earnings quality. However, the recent positive OCF in 2026Q2 suggests that the tide may be turning, but the cumulative deficit will take time to close.