Tango Therapeutics, Inc. (TNGX) Cash Flow Statement

The OCF/NI ratio hovered near 1.0 in most quarters, but the 2025Q3 spike to -1.95 reflects a one-time $53.8M milestone payment that boosted net income while operating cash flow stayed negative. Excluding that quarter, the ratio is consistently positive, indicating that non-cash items such as stock-based compensation (SBC) are the primary driver of the gap between net income and operating cash flow. This suggests the company's cash consumption is more predictable than the volatile net income figures imply.

The FCF trajectory shows a clear acceleration in cash consumption, with the most recent quarter's burn nearly double the level seen two years earlier. This trend aligns with the prior income statement analysis, which noted a 131% increase in SG&A expenses. Investors should monitor whether this elevated burn rate is sustainable given the company's cash reserves, as the lack of recurring revenue means the company is entirely dependent on external funding.

CapEx is negligible, with the highest quarterly spend at $624K in 2025Q2, which still represents only 19.6% of revenue due to the low revenue base. This suggests that TNGX's cash burn is driven almost entirely by operating expenses, particularly R&D and SG&A, rather than capital investment. The minimal capex implies that the company is not investing heavily in physical assets, which may be appropriate for a clinical-stage biotech but also means there is little to show for the cash consumed.

The negative working capital changes, particularly the -$54.4M in 2025Q3, are likely tied to the timing of milestone payments and related receivables. Excluding that outlier, the average drag is around -$7M per quarter, which may indicate that the company is building inventory or prepaying expenses as it advances its pipeline. This pattern warrants monitoring, as it could signal increasing operational complexity or inefficiencies in cash management.

The absence of capital returns is unsurprising given the company's negative cash flow and reliance on external funding. The cash flow statement shows zero dividends and buybacks, indicating that management is prioritizing operational needs over shareholder returns. This is consistent with a company in the clinical stage, where preserving cash for R&D is critical. However, the lack of any capital deployment strategy beyond operations may raise questions about long-term value creation.

The cumulative gap between net income and operating cash flow is relatively small, indicating that the company's losses are largely cash-based. The $23M difference is primarily attributable to stock-based compensation, which is a non-cash expense that reduces net income but does not affect cash. This implies that the company's cash burn is a true reflection of its operational reality, and the reported losses are not being artificially inflated by accounting adjustments. Investors should focus on the cash burn rate as the key metric for sustainability.