Persistent negative free cash flow, often exceeding $3 million per quarter, highlights a critical liquidity risk as the company continues to burn through its remaining $14.8 million cash reserve.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Cash from Operations | -16.05M | -15.64M | -15.33M | -24.77M | -16.89M | -51.72M | 281.39M | -15.08M | -22.3M | -14.94M | -22.02M | -26.41M | 1.97M | -7.28M | -19.59M | -18.25M | 74.9M | -6.94M | -8.06M | -7.8M | 47.53K | 112.83K | 40.61K | 80.41K | -40.29K | -306.33K | -2.61M | -2.21M | -400K |
| Operating CF Margin % | - | -9656.79% | -306540% | -353900% | -35193.75% | -147777.14% | 92.98% | -17741.18% | -35393.65% | -966% | -1420.32% | -1698.26% | 157.49% | -331.54% | -4755.58% | -91260% | 109842.61% | -26398.43% | -6029.11% | -10422% | 24.85% | 52.97% | 20.35% | 36.65% | -9.74% | -51.45% | -332.91% | -98.52% | -16% |
| Operating CF Growth % | -4.41% | -2.07% | 38.13% | -46.65% | 67.34% | -118.38% | 1965.97% | 32.37% | -49.21% | 32.12% | 16.64% | -1442.55% | 127% | 62.82% | -7.35% | -124.37% | 1178.52% | 13.88% | -3.35% | -16514.99% | -57.87% | 177.86% | -49.5% | 299.56% | 86.85% | 88.28% | -18.31% | -452.32% | - |
| Net Income | -18.9M | -18.23M | -18.18M | -27.87M | -36.26M | -42.92M | 280.43M | -19.18M | -25.41M | -17.28M | -28.57M | -29.23M | -9.9M | -27.61M | -26.92M | -17.26M | 41.42M | -13.08M | -12.07M | -8.69M | 60.42K | 120.52K | 65.12K | 68.7K | -7.09K | -1.29M | -2.61M | -2.46M | -500K |
| Depreciation & Amortization | 24K | 23K | 21K | 9K | 7K | 4K | 5K | 7K | 18K | 26K | 28K | 26K | 25K | 36K | 71K | 68K | 59.07K | 63.11K | 68.62K | 18.61K | 836 | 703 | 0 | 0 | 2.23K | 7.54K | 43.47K | 77.83K | 100K |
| Stock-Based Compensation | 2.28M | 1.97M | 1.9M | 2.78M | 3.33M | 4.18M | 3.94M | 3.71M | 4.05M | 3.99M | 5.4M | 7.28M | 8.19M | 7.56M | 6.16M | 4.37M | 3.38M | 3.03M | 2.68M | 818.87M | 0 | 0 | 0 | 0 | 0 | 133.58K | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 16.03M | -6.9M | -9.05M | -3.43M | 0 | 34.02M | 0 | 117K | -8.19M | -7.56M | 3.16M | 5.66M | -2.85M | -3.03M | -2.68M | -818.87M | 0 | 0 | 0 | 0 | 0 | -154.94K | 0 | 0 | 0 |
| Other Non-Cash Items | 207K | 500K | 1K | 15K | 0 | 34K | 69K | 3.43M | 3.46M | -34.02M | 30K | 91K | 5.95M | 5.96M | 927K | 5.59M | 29.53M | 3.03M | 2.68M | 818.87K | 0 | 0 | 0 | -3.05K | -30K | 1.35M | -230.68K | -13.41K | -2.52M |
| Working Capital Changes | 344K | 88K | 924K | 296K | -2K | -6.12M | 6M | 382K | -965K | -1.68M | 1.1M | -4.68M | 5.89M | 14.33M | -2.99M | -16.68M | 3.36M | 3.04M | 1.26M | 52.15K | -13.72K | -8.4K | -24.52K | 14.76K | -5.43K | -355.87K | 186.46K | 190.38K | 2.52M |
| Change in Receivables | 0 | -19K | 1K | -3K | 3K | -9K | -3K | 1K | -6K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3.48K | 8.9K | 72 | 6.37K | 11.01K | 113.53K | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 16.78K | 10.8K | 19.05K | -8.64K | 4.96K | 418.81K | 0 | 0 | 0 |
| Change in Payables | 25K | 52K | -104K | 67K | 35K | -316K | -692K | 296K | 636K | -1.39M | -477K | -1.04M | 1.81M | -1.45M | 1.97M | 708K | 3.4B | 2.81B | 1.14B | 444.4M | -20.27K | -19.69K | -19.13K | 2.27K | -15.97K | -532.33K | 0 | 0 | 0 |
| Cash from Investing | 8.47M | 8.77M | 12.46M | 35.94M | -38.53M | 1.03M | -25.95M | -606K | -370K | 7.79M | 700K | 12.6M | -2.77M | 6.63M | -12.08M | 28.97M | -43.47M | -5.98K | -20.72K | -8.95K | -652 | -2.53K | 0 | 8.62K | -623 | 166.36K | 287.6K | -1.24M | -100K |
| Capital Expenditures | -17K | -17K | -22K | -65K | -11K | -11K | 0 | -14K | 0 | 0 | -13K | -10K | -35K | -7K | -37K | -51K | -13.1K | -5.98K | -20.72K | -22.95K | -652 | -2.53K | 0 | 0 | -623 | 0 | -124.74K | 0 | -100K |
| CapEx % of Revenue | 10.49% | 10.49% | 440% | 928.57% | 22.92% | 31.43% | - | 16.47% | - | - | 0.84% | 0.64% | 2.8% | 0.32% | 8.98% | 255% | 19.21% | 22.73% | 15.49% | 30.66% | 0.34% | 1.19% | - | - | 0.15% | - | 15.89% | - | 4% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | -1.04M | 0 | 592K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 14.01K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.24M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 11K | 1.04M | 0 | -592K | -370K | 7.79M | 713K | 12.61M | -2.73M | 6.63M | -12.04M | 0 | 43.41B | 0 | 0 | 14.01M | 0 | 0 | 0 | 8.62K | -623 | 0 | 0 | 0 | 0 |
| Cash from Financing | -874K | -873K | -129K | -71.44M | -29K | -196K | -65.66M | 11.21M | 27.14M | 3.66M | 19.22M | 3.87M | 287K | 170K | 1.85M | 4.13M | 1.2M | 8.5M | -48K | 16.26M | 0 | 0 | -32.08K | 0 | 0 | 0 | 969.25K | 4.87M | 100K |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -44K | 0 | 1.5M | 0 | 0 | -32.08K | 0 | 0 | 0 | 0 | 0 | 100K |
| Equity Issued (Net) | -1K | 6K | -129K | -11K | -29K | -196K | 4.49M | 10.54M | 27.05M | 3.68M | 19.2M | 3.28M | 0 | 0 | 0 | 0 | 24.96M | 8.55M | 0 | 14.76M | 1.15M | 0 | 0 | 0 | 0 | 0 | 969.25K | 4.87M | 0 |
| Dividends Paid | 0 | 0 | 0 | -71.43M | 0 | 0 | -70.84M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -23.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -7K | 0 | -129K | -11K | -29K | -196K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -873K | -879K | 0 | 0 | 0 | 0 | 690K | 671K | 92K | -20K | 20K | 596K | 287K | 170K | 1.85M | 4.13M | -160K | 0 | -48K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net Change in Cash | -8.45M | -7.75M | -2.99M | -60.27M | -55.46M | -50.89M | 189.77M | -4.48M | 4.48M | -3.49M | -2.1M | -9.93M | -515K | -488K | -29.82M | 14.85M | 32.62M | 1.55M | -8.13M | 8.45M | 37.84K | 78.22K | 995 | 90.15K | -53.25K | -102.22K | -1.41M | 1.44M | -400K |
| Free Cash Flow | -16.06M | -15.66M | -15.35M | -24.84M | -16.9M | -51.73M | 281.39M | -15.09M | -22.3M | -14.94M | -22.03M | -26.42M | 1.93M | -7.29M | -19.63M | -18.3M | 74.88M | -6.95M | -8.08M | -7.83M | 46.88K | 110.3K | 40.61K | 80.41K | -40.92K | -306.33K | -2.74M | -2.21M | -500K |
| FCF Margin % | -9916.05% | -9667.28% | -306980% | -354828.57% | -35216.67% | -147808.57% | 92.98% | -17757.65% | -35393.65% | -966% | -1421.16% | -1698.91% | 154.68% | -331.86% | -4764.56% | -91515% | 109823.4% | -26421.16% | -6044.6% | -10452.67% | 24.51% | 51.78% | 20.35% | 36.65% | -9.89% | -51.45% | -348.8% | -98.52% | -20% |
| FCF Growth % | -2.14% | -2.03% | 38.2% | -46.94% | 67.32% | -118.38% | 1964.24% | 32.31% | -49.21% | 32.16% | 16.62% | -1467.39% | 126.5% | 62.86% | -7.25% | -124.44% | 1177.4% | 14.03% | -3.31% | -16792.25% | -57.5% | 171.63% | -49.5% | 296.52% | 86.64% | 88.81% | -23.96% | -341.85% | - |
| FCF per Share | -4.28 | -4.29 | -4.27 | -6.94 | -4.74 | -14.54 | 78.58 | -4.40 | -7.08 | -5.12 | -7.87 | -10.09 | 0.75 | -2.85 | -7.71 | -0.37 | 1.53 | -0.18 | -0.23 | -0.22 | 0.00 | 0.07 | 0.02 | 0.05 | -0.02 | -0.20 | -2.08 | -1.68 | -0.42 |
| FCF Conversion (FCF/Net Income) | 0.85x | 0.86x | 0.84x | 0.89x | 0.47x | 1.21x | 1.00x | 0.79x | 0.88x | 0.86x | 0.77x | 0.90x | -0.20x | 0.26x | 0.73x | 1.06x | 1.81x | 0.53x | 0.67x | 0.90x | 0.79x | 0.94x | 0.62x | 1.15x | 1.09x | 0.23x | 1.00x | 0.90x | 0.80x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 10K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 3K | 0 | 2K | 2K | 38.98M | 4K | 3K | 5K | 126K | 6K | 2K | 0 | 0 | 9.6M | 29.56M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Liquidity exhaustion from burn
According to recent financial statements, VirnetX consistently reports operating cash flow that closely tracks net losses, with an OCF/NI ratio frequently near 0.90, indicating that the company lacks non-cash accruals to bridge the gap between its accounting losses and actual cash outflows.
The tight correlation between net income and operating cash flow suggests that the company's losses are primarily driven by cash-based operating expenses rather than non-cash accounting charges. This lack of divergence implies that the business model is currently incapable of generating the internal cash flow necessary to sustain its own operations.
As reported in quarterly filings, VirnetX has maintained a consistent pattern of negative free cash flow, with quarterly outflows often exceeding $3 million, demonstrating that the company's transition to a SaaS model has yet to yield a self-sustaining cash generation profile.
The persistent negative free cash flow trajectory highlights the structural difficulty of scaling the VirnetX One platform without significant capital investment. Investors should monitor whether the company can achieve a positive inflection point before its current cash reserves are depleted by ongoing operating requirements.
Based on the provided cash flow data, VirnetX relies heavily on stock-based compensation, which averaged over $500,000 per quarter, effectively masking the true extent of the company's cash-based operating burn and diluting shareholders while the core business remains unable to generate positive cash flow.
While stock-based compensation is a non-cash expense, its consistent use suggests a reliance on equity to preserve cash for essential legal and operational costs. This practice warrants further investigation as it may indicate that the company's cash position is even more precarious than the headline figures suggest.
Data from recent financial statements indicates that VirnetX has historically prioritized large, non-recurring dividend payments, such as the $71.4 million outflow in 2023Q4, which appears disconnected from the company's current need to fund its nascent software product development and maintain operational liquidity.
The decision to return significant capital to shareholders while the company simultaneously reports deep operating losses suggests a potential misalignment between capital allocation and the requirements of a growth-stage software business. This strategy appears to have significantly reduced the company's financial flexibility during a critical transition period.
Quick answers to the most common questions about buying VHC stock.
VirnetX Holding Corp (VHC) generated $-15.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
VirnetX Holding Corp (VHC) reported negative free cash flow of $15.7M in 2025, indicating capital requirements exceeded cash from operations.
VirnetX Holding Corp (VHC) 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.