Vir Biotechnology, Inc. (VIR) Cash Flow Statement

The relationship between net income and operating cash flow is highly erratic, reflecting the lumpy recognition of collaboration milestones. For instance, in 2026Q2, net income of $80.1M was accompanied by negative operating cash flow of -$9.1M, suggesting that the reported profit was largely non-cash or tied to receivables. Conversely, in 2024Q1, a net loss of -$65.3M was paired with a larger operating cash outflow of -$109.4M, indicating that cash burn exceeds accounting losses in some periods. This volatility implies that earnings quality is low and that investors should rely more on cash flow metrics than net income.

Even in 2026Q2, when revenue spiked to $238.9M, FCF remained negative at -$9.5M, underscoring that the company's operating model is not yet self-sustaining. The FCF margin has swung wildly, from -4.0% in 2026Q2 to -699.5% in 2025Q3, reflecting the absence of steady revenue streams. This pattern suggests that Vir remains in a heavy investment phase, and the episodic nature of collaboration payments does not yet provide a reliable foundation for positive cash generation.

Vir's capex is negligible relative to its scale, indicating that the company relies on outsourced manufacturing and external partnerships rather than owning significant fixed assets. This low capital intensity is typical of a clinical-stage biotech, but it also means that the primary cash drain is operating expenses, particularly R&D. The depreciation and amortization charges, which have ranged from $2.8M to $9.5M per quarter, are modest and do not suggest a need for heavy replacement capex in the near term.

The large swings in working capital are likely driven by the timing of collaboration payments and related receivables. For example, in 2024Q1, a working capital outflow of -$82.1M coincided with a significant net loss, suggesting that the company may have paid down liabilities or built up receivables. In contrast, 2025Q1 saw a positive working capital change of +$26.1M, which may indicate a release of cash from operations. These fluctuations make it difficult to discern a clear trend in the company's cash conversion cycle, but they highlight the importance of monitoring the timing of milestone receipts.

The absence of shareholder returns is consistent with a company in a growth phase that is burning cash. The only acquisition-related cash flows are negligible, suggesting that Vir is not pursuing significant M&A activity. This capital deployment strategy implies that management is prioritizing pipeline development over returning capital to shareholders, which is typical for a biotech with no approved products generating steady revenue.

The near parity between cumulative net income and operating cash flow suggests that non-cash charges, such as stock-based compensation and depreciation, are roughly offset by working capital changes. However, the quarterly volatility is extreme, with some quarters showing OCF/NI above 1.0 and others below zero. This indicates that the company's cash flow is heavily influenced by the timing of collaboration payments, which may not be sustainable. Investors should monitor whether Vir can achieve consistent cash generation from its pipeline without relying on episodic milestones.