Cash conversion remains robust with an OCF/NI ratio of 4.26 in 2025Q4, though free cash flow margins remain volatile, fluctuating between 1.7% and 19.5% over the last ten quarters.
Ermenegildo Zegna N.V. (ZGN) cash flow statement — 8-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Cash from Operations | 659.39M | 322.32M | 279.13M | 275.38M | 146.4M | 281.15M | 70.91M | 174.12M | 192.76M |
| Operating CF Margin % | - | 17.5% | 14.34% | 14.46% | 9.81% | 21.75% | 6.95% | 13.18% | 16.3% |
| Operating CF Growth % | 85.54% | 15.47% | 1.36% | 88.11% | -47.93% | 296.52% | -59.28% | -9.67% | - |
| Net Income | 173.64M | 94.69M | 90.86M | 135.66M | 65.28M | -127.66M | -46.54M | 12.72M | 37.71M |
| Depreciation & Amortization | 362.2M | 235.22M | 235.95M | 193.17M | 173.52M | 154.19M | 166.21M | 177.07M | 160.59M |
| Stock-Based Compensation | 6.42M | 0 | 0 | 0 | 13.58M | 16.29M | 0 | 0 | 0 |
| Deferred Taxes | -2.99M | -8.59M | 39.75M | 33.43M | 35.8M | 30.7M | 0 | 43.79M | 29.39M |
| Other Non-Cash Items | 253.8M | 44.66M | 30.51M | 55.01M | 9.44M | 196.08M | 3.57M | -23.4M | -18.34M |
| Working Capital Changes | -133.69M | -43.66M | -117.94M | -141.89M | -151.22M | 11.55M | -52.33M | -36.06M | -16.59M |
| Change in Receivables | 4.78M | -2.93M | -12.57M | -49.98M | -15.62M | -12.29M | 35.67M | -8.38M | -6.23M |
| Change in Inventory | -55.62M | -22.67M | -5.9M | -71.28M | -103.11M | -27.55M | -39.49M | -5.4M | -33.59M |
| Change in Payables | 36.31M | 23.21M | -13.1M | 11.43M | 43.51M | 31.43M | -38.48M | -11M | 17.66M |
| Cash from Investing | -213.09M | -105.58M | -126.01M | 21.79M | -57.34M | -82M | 92.57M | 83.96M | -334.55M |
| Capital Expenditures | -213.95M | -101.64M | -100.1M | -57.03M | -73.3M | -94.33M | -39.15M | -59.51M | -60.09M |
| CapEx % of Revenue | 5.49% | 5.52% | 5.14% | 2.99% | 4.91% | 7.3% | 3.84% | 4.5% | 5.08% |
| Acquisitions | -5.85M | -4.39M | -19.31M | -115.27M | -585K | -4.54M | -2.25M | -9.34M | -337.67M |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | 15.83M | 4.39M | -29.27M | -36.02M | 2.47M | 896K | 47.1M | -7.31M | 25.4M |
| Cash from Financing | -441.46M | -206.57M | -234.53M | -250.49M | -297M | -64.11M | -49.05M | -267.49M | 131.87M |
| Debt Issued (Net) | -237.75M | -285.56M | -174.61M | -227.46M | -285.27M | -141.54M | -46.38M | -252.47M | 144.07M |
| Equity Issued (Net) | 106.42M | 102.98M | 0 | 3.65M | 14.31M | 193.08M | -945K | -94K | 2.45M |
| Dividends Paid | -60.56M | -29.29M | -30.29M | -25.03M | -21.85M | -102K | -1.73M | -12.73M | -14.65M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | -455M | -945K | -94K | 0 |
| Other Financing | -249.57M | 5.29M | -29.63M | -1.66M | -4.19M | -115.55M | 0 | -2.19M | 0 |
| Net Change in Cash | 13.33M | 26.9M | -77.15M | 41.96M | -205.47M | 142.5M | 106.67M | -7.71M | -10.28M |
| Free Cash Flow | 471.67M | 242.19M | 153.6M | 197.5M | 73.1M | 186.83M | 31.75M | 114.62M | 132.67M |
| FCF Margin % | 12.1% | 13.15% | 7.89% | 10.37% | 4.9% | 14.46% | 3.11% | 8.67% | 11.22% |
| FCF Growth % | 25.58% | 57.67% | -22.23% | 170.19% | -60.87% | 488.4% | -72.3% | -13.61% | - |
| FCF per Share | 1.75 | 0.93 | 0.60 | 0.78 | 0.30 | 0.92 | 0.14 | 0.47 | 0.55 |
| FCF Conversion (FCF/Net Income) | 2.72x | 3.40x | 3.62x | 2.27x | 2.84x | -2.07x | -1.40x | 8.01x | 5.11x |
| Interest Paid | 39.21M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying ZGN stock.
Ermenegildo Zegna N.V. (ZGN) generated $322.3M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Ermenegildo Zegna N.V. (ZGN) generated $242.2M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Ermenegildo Zegna N.V. (ZGN) spent $101.6M 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, Ermenegildo Zegna N.V. (ZGN) returned $29.3M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
China luxury market exposure
Operating Cash Flow Outpacing Earnings
According to recent financial disclosures, ZGN consistently reports operating cash flow significantly higher than net income, with the OCF/NI ratio reaching 4.26 in 2025Q4, suggesting that non-cash charges and accounting accruals play a substantial role in the company's reported bottom-line profitability metrics.
The persistent gap between net income and operating cash flow indicates that ZGN's earnings are heavily influenced by significant depreciation and amortization, which is consistent with its capital-intensive manufacturing base. Investors should monitor whether this cash conversion quality remains sustainable as the company integrates the Tom Ford license and shifts its retail footprint.
Free Cash Flow Margin Volatility
As reported in quarterly filings, ZGN's free cash flow margin has fluctuated between 1.7% and 19.5% over the last ten quarters, reflecting the lumpy nature of capital expenditures and the ongoing challenges in maintaining consistent cash generation during the current brand transformation phase.
The volatility in FCF margins suggests that the company's cash generation is highly sensitive to the timing of inventory investments and retail expansion projects. While the 2025Q4 FCF margin of 19.5% appears robust, it may be an outlier driven by temporary working capital shifts rather than a permanent improvement in underlying cash flow efficiency.
Capital Intensity Reflects Manufacturing Heritage
Based on the provided financial data, ZGN's capital expenditure as a percentage of revenue has trended between 2.2% and 9.2%, highlighting the company's ongoing commitment to maintaining its proprietary textile mills and upgrading its global retail estate to support the new brand identity.
The elevated CapEx levels in periods like 2021Q4 suggest that the company is prioritizing long-term asset maintenance and store modernization over short-term cash preservation. This capital intensity is a structural necessity for a vertically integrated luxury player, though it may continue to weigh on free cash flow during periods of revenue contraction.
Working Capital Drag on Liquidity
Financial statements indicate that ZGN has experienced consistent negative working capital changes, with outflows reaching as high as $124.5 million in 2022Q2, which suggests that the company is absorbing significant cash to manage inventory levels and support its expanding direct-to-consumer retail network.
The persistent cash outflow from working capital appears to be a byproduct of the company's strategy to hold higher inventory levels to ensure product availability across its global store network. This trend warrants further investigation to determine if these inventory builds are aligned with actual sell-through rates or if they represent a potential risk of future obsolescence.