Cactus, Inc. (WHD) Cash Flow Statement

The 2026Q1 net loss of $48.6M was accompanied by $128.3M in operating cash flow, suggesting the loss was largely non-cash, likely from an impairment or write-down. Excluding that quarter, OCF/NI consistently ranged from 0.94 to 2.21, with the 2025Q1 dip to 0.94 reflecting a working capital outflow. This pattern indicates that reported earnings are backed by cash generation, though investors should monitor the sustainability of the 2026Q2 OCF/NI of 2.13, which may benefit from favorable working capital timing.

The 2026Q1 FCF of $118.5M was inflated by a $39.7M working capital release, while 2025Q1's $31.3M was depressed by a $42.0M working capital outflow. Excluding these extremes, FCF margins have hovered around 20-25%, which is robust for the sector. However, the 2026Q2 revenue surge to $449.5M did not proportionally boost FCF margin (19.6%), suggesting that growth may be consuming cash or that margins are under pressure, warranting further investigation into the cost structure.

The 2025Q4 CapEx spike to $28.6M (11.0% of revenue) appears anomalous, possibly reflecting a one-time investment or timing, as other quarters ranged from 2.5% to 4.5%. This low capital intensity suggests that Cactus's asset base is not requiring heavy reinvestment, which supports free cash flow generation. However, the company's ability to sustain growth without increasing capex may be limited, and investors should monitor whether the 2025Q4 level signals a new investment phase.

The large positive working capital change in 2026Q1 likely reflects improved collections or delayed payments, while the negative change in 2025Q1 suggests the opposite. These swings are not unusual for an equipment manufacturer with project-based revenue, but they complicate quarter-to-quarter cash flow comparability. The 2026Q2 working capital use of $6.9M is modest, but the pattern suggests that management may be using working capital levers to smooth cash flow, which could reverse in future periods.

Dividends have grown steadily from $8.1M in 2024Q1 to $12.5M in 2026Q2, but buybacks have been minimal, with the largest repurchase being $8.3M in 2024Q1. The 2026Q1 acquisition of $301M stands out as a major cash deployment, which may explain the reduced buyback activity. This suggests that management is prioritizing M&A over shareholder returns, which could be value-accretive if the acquisition integrates well, but investors should monitor the return on that investment.

The gap is largely attributable to depreciation and amortization, which totaled over $200M, and the 2026Q1 non-cash loss. This divergence suggests that Cactus's earnings quality is high, as cash flows are not being inflated by aggressive accruals. However, the 2026Q1 loss and the subsequent recovery highlight the volatility in reported earnings, which may not fully reflect the underlying cash-generating ability of the business.