Cash flow remains consistently negative with a -33.0% FCF margin in 2026Q1, further pressured by questionable capital allocation decisions such as the $10.2 million share repurchase program executed in 2025Q2.
| Cash from Operations | -10.3M | -12.72M | 1.02M | -6.36M | -22.09M | -21.61M | -19.61M | -21.62M |
| Operating CF Margin % | - | -18.01% | 1.76% | -7.56% | -24.36% | -30.57% | -34.45% | -36% |
| Operating CF Growth % | -207.89% | -1348.09% | 116.02% | 71.22% | -2.25% | -10.22% | 9.3% | - |
| Net Income | -31.56M | -31.58M | -36.58M | -19.66M | -27.67M | -26.53M | -19.64M | -25.93M |
| Depreciation & Amortization | 3.4M | 2.98M | 2.55M | 1.63M | 1.38M | 1.1M | 1.09M | 1.04M |
| Stock-Based Compensation | 3.77M | 0 | 15.12M | 15.03M | 12.09M | 9.87M | 5.33M | 2.86M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -427K |
| Other Non-Cash Items | 13.67M | 20.24M | 3.37M | 259K | 1.86M | -218K | -2.18M | 188K |
| Working Capital Changes | 413K | -4.36M | 16.57M | -3.62M | -9.76M | -5.83M | -4.22M | 654K |
| Change in Receivables | -954K | -2.25M | 7.18M | -3.17M | -4.42M | 1.58M | -944K | 2.46M |
| Change in Inventory | -205K | -178K | 6.18M | 9.98M | -14.49M | -6.16M | -449K | -1.73M |
| Change in Payables | -437K | 0 | 594K | -6.37M | 5.84M | 2.63M | -1.47M | -545K |
| Cash from Investing | 12.9M | 28.03M | 17.78M | 1.35M | -11.73M | -84.16M | 28.31M | 10.57M |
| Capital Expenditures | -1.09M | -1.07M | -1.87M | -1.19M | -1.11M | -1.44M | -861K | -1.43M |
| CapEx % of Revenue | 1.54% | 1.52% | 3.23% | 1.41% | 1.22% | 2.04% | 1.51% | 2.38% |
| Acquisitions | 0 | 0 | -7.8M | 0 | 0 | 0 | 0 | -12M |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | -653K | -1.32M | -1.12M | 0 | 0 | 0 | 0 | 12M |
| Cash from Financing | -14.88M | -23.09M | -155K | 1.5M | 822K | 135.43M | 406K | 132K |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | -13.11M | -23.09M | -1.02M | 0 | 0 | 1.25M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -14.4M | -23.99M | -1.02M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.76M | 0 | 861K | 1.5M | 822K | 134.19M | 406K | 132K |
| Net Change in Cash | -12.05M | -7.57M | 18.16M | -2.76M | -36.77M | 30.48M | 10.76M | -10.49M |
| Free Cash Flow | -11.39M | -13.79M | -848K | -7.54M | -23.2M | -23.05M | -20.47M | -23.05M |
| FCF Margin % | -16.12% | -19.52% | -1.47% | -8.96% | -25.58% | -32.61% | -35.96% | -38.39% |
| FCF Growth % | -53.99% | -1525.94% | 88.76% | 67.49% | -0.66% | -12.63% | 11.2% | - |
| FCF per Share | -0.11 | -0.13 | -0.01 | -0.07 | -0.24 | -0.70 | -1.42 | -1.97 |
| FCF Conversion (FCF/Net Income) | 0.36x | 0.40x | -0.03x | 0.32x | 0.80x | 0.81x | 1.00x | 0.83x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 58K | 0 | 122K | 293K | 214K | 0 | 139K | 433K |
Insufficient liquidity runway
Based on reported quarterly filings, the persistent gap between net income and operating cash flow, highlighted by an OCF/NI ratio of 0.62 in 2026Q1, suggests that accounting accruals and non-cash adjustments are significantly obscuring the underlying cash-generative capacity of the firm's core semiconductor operations.
The divergence between net losses and operating cash flow indicates that the company's reported bottom line is heavily influenced by non-cash items, likely including stock-based compensation and depreciation. Investors should monitor whether this conversion gap narrows as the automotive segment matures, as current figures suggest a reliance on accounting adjustments to bridge the operational deficit.
As reported in financial statements, VLN's free cash flow trajectory remains consistently negative, with a -33.0% FCF margin in 2026Q1, indicating that the company's current business model is unable to self-fund its ongoing R&D and operational requirements without external capital support.
The inability to generate positive free cash flow despite high gross margins points to an unsustainable cost structure that prioritizes long-term automotive design wins over immediate liquidity. This trajectory warrants further investigation into whether the company can reach a cash-flow-positive inflection point before its existing cash reserves are exhausted.
According to recent SEC filings, working capital changes have been highly erratic, swinging from a $3.2 million inflow in 2024Q1 to a $5.3 million outflow in 2025Q1, which suggests that inventory management and collection cycles are currently subject to significant, unpredictable fluctuations in demand.
These swings in working capital appear to reflect the lumpy nature of semiconductor distribution and the challenges of managing inventory in a fabless model. The volatility suggests that the company may be struggling to align its production cycles with actual end-market demand, potentially leading to inefficient cash usage.
Based on reported figures, the company has utilized significant cash for share repurchases, including $10.2 million in 2025Q2, even while operating cash flow remained negative, which appears to be a questionable deployment of capital given the company's ongoing liquidity constraints and high R&D burn.
The decision to return capital to shareholders while the core business is still in a cash-burning phase may indicate management's confidence in future automotive revenue, yet it simultaneously depletes the cash runway. This strategy warrants further scrutiny regarding the long-term impact on the company's ability to navigate potential operational downturns.
As indicated by financial disclosures, stock-based compensation remains a material non-cash expense, frequently exceeding $3.5 million per quarter, which effectively masks the true economic cost of maintaining the engineering talent necessary to compete in the high-stakes automotive semiconductor market.
While SBC is a standard tool for talent retention in the Israeli tech sector, its magnitude relative to the company's cash burn suggests that the true cost of operations is higher than the reported net loss implies. Investors should consider the dilutive impact of these grants alongside the company's ongoing cash requirements.
Quick answers to the most common questions about buying VLN stock.
Valens Semiconductor Ltd. (VLN) generated $-12.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Valens Semiconductor Ltd. (VLN) reported negative free cash flow of $13.8M in 2025, indicating capital requirements exceeded cash from operations.
Valens Semiconductor Ltd. (VLN) spent $1.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Valens Semiconductor Ltd. (VLN) spent $24.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.