Cash flow remains sensitive to working capital cycles, as evidenced by a $65.7M outflow in 2026Q1 and a fluctuating OCF/NI ratio that reached a low of 0.78.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Mar'20 | Mar'19 | Mar'18 | Mar'17 | Mar'16 | Mar'15 | Mar'14 | Mar'13 | Mar'12 | Mar'11 | Mar'10 | Dec'99 | Dec'98 | Dec'97 | Dec'96 | Dec'95 | Dec'94 | Dec'93 | Dec'92 | Dec'91 | Dec'90 | Dec'89 |
|---|
| Cash from Operations | 349.7M | 346.5M | 293.5M | 253.9M | 97M | 223.6M | 196.3M | 298.6M | 258.1M | 228.5M | 195.1M | 219M | 245.9M | 190.8M | 144.5M | 139.3M | 164.5M | 155.5M | 989K | -2M | -1.4M | -900K | -1.7M | -1.6M | 2.9M | 200K | 2.4M | 100K | 1.4M |
| Operating CF Margin % | - | 20.43% | 18.74% | 16.59% | 7.57% | 24.55% | 34.89% | 42.05% | 12.58% | 12.34% | 11.39% | 11.38% | 11.99% | 9.38% | 7.43% | 7.16% | 9.82% | 10.3% | 6.22% | -14.55% | -60.92% | -900% | -1700% | -1.9% | 3.46% | 0.23% | 2.63% | 0.08% | 1.19% |
| Operating CF Growth % | 93.05% | 18.06% | 15.6% | 161.75% | -56.62% | 13.91% | -34.26% | 15.69% | 12.95% | 17.12% | -10.91% | -10.94% | 28.88% | 32.04% | 3.73% | -15.32% | 5.79% | 15622.95% | 149.45% | -42.86% | -55.56% | 47.06% | -6.25% | -155.17% | 1350% | -91.67% | 2300% | -92.86% | - |
| Net Income | 213.3M | 198M | 160.2M | 112.7M | 61.7M | 120.9M | 118.2M | 180.1M | 34.3M | 76M | 74.1M | 69M | 93.5M | 29.6M | 50.1M | 29.9M | -51.3M | 88.1M | -736K | -500K | -200K | -1.3M | -6.9M | 200K | 200K | -1.3M | 500K | -3.6M | 100K |
| Depreciation & Amortization | 87M | 88.7M | 88.3M | 87.9M | 54.5M | 77.5M | 67M | 86.6M | 92.3M | 89.7M | 105.4M | 115.4M | 112.2M | 108.5M | 112.4M | 114.4M | 106.1M | 109.3M | -485K | -400K | -200K | 0 | -300K | -500K | -600K | -600K | -600K | -600K | -600K |
| Stock-Based Compensation | 41.8M | 40.6M | 37.9M | 40M | 25M | 51.4M | 36.6M | 26.9M | 22.6M | 20.5M | 13.4M | 7.5M | 6.4M | 7M | 7.1M | 3.7M | 5.6M | 5.5M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -1.2M | -4.6M | -14.8M | -4.2M | 500K | -12.1M | -7M | -2.8M | -27.5M | -77.5M | -18.4M | -13.9M | -36.9M | -24.9M | -15.4M | -21.8M | -22.9M | 33.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 15.8M | -2.5M | 12.3M | -3.1M | 3.2M | 10.3M | 700K | 38.9M | 152.2M | 125.7M | 8.3M | 42.6M | 54.7M | 140.7M | 37.1M | 43.6M | 114.3M | -136.6M | 965K | 700K | 500K | 300K | 2.5M | -1.3M | 1.1M | 2.1M | 1.4M | 3.1M | 1.3M |
| Working Capital Changes | -7M | 26.3M | 9.6M | 20.6M | -47.9M | -24.4M | -19.2M | -31.1M | -15.8M | -5.9M | 12.3M | -1.6M | 16M | -67.4M | -41.3M | -30.5M | 12.7M | 55.9M | 1.25M | -1.8M | -1.5M | 100K | 3M | 0 | 2.2M | 0 | 1.1M | 1.2M | 600K |
| Change in Receivables | 800K | 18.4M | 6.3M | 10.1M | 15.5M | -66.6M | 65.1M | -19.9M | -29.8M | -31M | -5.8M | 1.5M | 6.1M | -11.3M | -20.3M | -33.8M | -28.8M | 29.8M | 1.51M | -2M | -700K | 400K | 9.1M | 0 | -1M | 0 | 2M | 1.5M | 1.4M |
| Change in Inventory | -10.4M | -100K | 2.7M | 65M | -17.6M | -79.5M | 500K | 100K | -24.7M | 11.5M | 22.5M | 37.7M | -15.2M | -11.3M | -12.8M | -2.1M | -2.9M | 57.7M | 0 | 0 | 0 | 0 | -1.9M | 0 | 2.7M | 0 | -200K | 1.2M | 0 |
| Change in Payables | 3.8M | -6.8M | 15.8M | -60.8M | -18.3M | 99.1M | -65.1M | -3.7M | -1.3M | 13M | -5.3M | -32.4M | 3.7M | 26M | -4.3M | 22.5M | 43M | -500K | 31K | 300K | -500K | -400K | -4.7M | 0 | 100K | 0 | 0 | -1.4M | 900K |
| Cash from Investing | -29M | -29.9M | -20.2M | -4.6M | -6.6M | -21.9M | -122.5M | -53.3M | -53.3M | -208.8M | -264M | -45.2M | -177.3M | -163.8M | -81.8M | -324.2M | -35.5M | -22M | -160K | -500K | -3.2M | 900K | 15.2M | -200K | -200K | -100K | -200K | -600K | -3.9M |
| Capital Expenditures | -29M | -29.9M | -21.8M | -21.3M | -7.6M | -23.3M | -28.3M | -44.9M | -44.9M | -40.7M | -54.5M | -52.1M | -48.8M | -52.2M | -60.1M | -58.5M | -37.6M | -22M | -178K | -1M | -100K | 0 | 0 | -200K | -200K | -100K | -200K | -600K | -300K |
| CapEx % of Revenue | 1.67% | 1.76% | 1.39% | 1.39% | 0.59% | 2.56% | 5.03% | 6.32% | 2.19% | 2.2% | 3.18% | 2.71% | 2.38% | 2.57% | 3.09% | 3.01% | 2.24% | 1.46% | 1.12% | 7.28% | 4.35% | - | - | 0.24% | 0.24% | 0.12% | 0.22% | 0.51% | 0.25% |
| Acquisitions | 0 | 0 | 0 | 0 | -44.8M | -17.1M | -102M | -23.4M | -23.4M | -173.6M | -213.7M | 1.1M | -129M | -112M | -18.7M | -253.4M | 2.1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 1.6M | 16.7M | 45.8M | 18.5M | 7.8M | 15M | 15M | 5.5M | 4.2M | 5.8M | 500K | 400K | -3M | -12.3M | 0 | 0 | 18K | 500K | -3.1M | 900K | 15.2M | 0 | 0 | 0 | 0 | 0 | -3.6M |
| Cash from Financing | -194.4M | -217.3M | -207.5M | -239.2M | -61.1M | -356.2M | -409.6M | 114.9M | -116.7M | -308.8M | 79.9M | -56.3M | -17.4M | -210.3M | 165.7M | 93.2M | -6.9M | -161.5M | -812K | 1.9M | 0 | -500K | -7.9M | 2M | -2.7M | -200K | -2.3M | 300K | 2.6M |
| Debt Issued (Net) | -900K | -800K | -800K | -64.9M | -5.7M | -576.7M | -330.4M | 214.4M | -98.2M | -280.6M | -298.9M | -24.5M | -24.3M | -275.3M | -311M | 104.3M | 9.6M | -154.9M | - | - | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | -124.5M | -152M | -150.2M | -125.1M | -24.7M | -900K | -59.3M | -100.7M | - | - | 389.7M | -40M | - | 73.8M | 458.3M | 2.1M | -1M | -200K | - | - | - | - | - | - | - | - | - | - | - |
| Dividends Paid | -67.1M | -63.9M | -56.6M | -50.4M | -32.5M | -36.4M | -28.8M | -27.2M | -23.2M | -23.2M | -4.4M | 0 | 0 | 0 | 0 | 0 | -1.15B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -132.5M | -159.9M | -150.2M | -125.1M | -24.7M | -900K | -59.3M | -100.7M | 0 | 0 | 0 | -40M | 0 | 0 | 0 | 0 | -1M | -200K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.9M | -600K | 100K | 1.2M | 1.8M | 257.8M | 8.9M | 28.4M | 4.7M | -5M | -6.5M | 8.2M | 6.9M | -8.8M | 18.4M | -13.2M | -15.5M | -6.4M | -812K | 1.9M | 0 | -500K | -7.9M | 2M | -2.7M | -200K | -2.3M | 300K | 2.6M |
| Net Change in Cash | 128.8M | 102.5M | 61.3M | 11.9M | 28.2M | -159M | -317.8M | 280.9M | 74.9M | -272.5M | 5.5M | 114.3M | 31.3M | -185.1M | 226.1M | -93M | 127.1M | -24M | 17K | -600K | -4.6M | -500K | 5.6M | 200K | 0 | -100K | -100K | -200K | 100K |
| Free Cash Flow | 320.7M | 316.6M | 271.7M | 232.6M | 89.4M | 200.3M | 168M | 257.2M | 213.2M | 187.8M | 140.6M | 166.9M | 197.1M | 138.6M | 84.4M | 80.8M | 126.9M | 133.5M | 811K | -3M | -1.5M | -900K | -1.7M | -1.8M | 2.7M | 100K | 2.2M | -500K | 1.1M |
| FCF Margin % | 18.43% | 18.67% | 17.34% | 15.2% | 6.97% | 21.99% | 29.86% | 36.22% | 10.4% | 10.14% | 8.21% | 8.68% | 9.61% | 6.81% | 4.34% | 4.16% | 7.58% | 8.84% | 5.1% | -21.83% | -65.27% | -900% | -1700% | -2.14% | 3.22% | 0.12% | 2.41% | -0.42% | 0.93% |
| FCF Growth % | 23.3% | 16.53% | 16.81% | 160.18% | -55.37% | 19.23% | -34.68% | 20.64% | 13.53% | 33.57% | -15.76% | -15.32% | 42.21% | 64.22% | 4.46% | -36.33% | -4.94% | 16361.16% | 127.03% | -100% | -66.67% | 47.06% | 5.56% | -166.67% | 2600% | -95.45% | 540% | -145.45% | - |
| FCF per Share | 1.89 | 1.85 | 1.56 | 1.31 | 0.58 | 1.60 | 1.36 | 2.07 | 1.73 | 1.77 | 1.34 | 1.62 | 1.88 | 1.37 | 0.85 | 1.12 | 1.76 | 1.85 | 0.33 | -1.20 | -0.60 | -0.44 | -0.82 | -0.99 | 1.08 | 0.05 | 0.97 | -0.24 | 0.66 |
| FCF Conversion (FCF/Net Income) | 1.50x | 1.75x | 1.83x | 2.25x | 1.57x | 1.85x | 1.66x | 1.66x | 7.52x | 3.01x | 2.63x | 3.23x | 2.93x | 6.32x | 2.88x | 4.66x | -3.21x | 1.77x | -1.34x | 4.00x | 7.00x | 0.69x | 0.25x | -8.00x | 14.50x | -0.15x | 4.80x | -0.03x | 14.00x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Non-residential construction cyclicality
As reported in recent financial filings, ZWS exhibits significant quarterly volatility in cash conversion, with the OCF/NI ratio swinging from a high of 4.19 in 2023Q4 to a low of 0.78 in 2026Q1, highlighting the impact of working capital timing on reported earnings quality.
The divergence between net income and operating cash flow suggests that accounting accruals and timing differences play a substantial role in quarterly performance. Investors should monitor whether the recent compression in the conversion ratio indicates a structural shift in collection efficiency or merely temporary inventory management adjustments.
Based on the provided cash flow statements, ZWS's FCF margin has fluctuated between 9.9% and 22.9% over the last ten quarters, reflecting a business model that remains sensitive to the timing of project-based revenue recognition and the associated working capital requirements inherent in institutional water infrastructure.
While the company demonstrates an ability to generate strong cash flow during peak quarters, the inconsistency in FCF margins suggests that operational cash generation is not yet fully decoupled from the cyclical nature of non-residential construction. This variability warrants caution when projecting long-term cash flow sustainability.
According to the quarterly data, ZWS experienced a significant working capital outflow of $65.7M in 2026Q1, which stands in stark contrast to the $37.2M inflow observed in 2025Q2, indicating that the company's cash position is highly susceptible to the timing of inventory builds and distributor payment cycles.
The sharp swings in working capital suggest that the company may be carrying higher inventory levels to support its specification-led business model. This reliance on inventory management implies that any slowdown in end-market demand could lead to rapid cash absorption, potentially straining liquidity in the short term.
As evidenced by the company's financial statements, ZWS has consistently prioritized shareholder returns, deploying $77.4M toward share repurchases in 2025Q1 alone, which appears to be a core component of management's strategy to utilize the cash generated from its water management operations.
The consistent use of cash for dividends and buybacks, despite the volatility in operating cash flow, suggests a high degree of confidence from management in the company's underlying cash-generating capacity. However, investors should consider whether this capital allocation pace is sustainable if the current construction cycle faces a prolonged downturn.
Quick answers to the most common questions about buying ZWS stock.
Zurn Elkay Water Solutions Corporation (ZWS) generated $346.5M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Zurn Elkay Water Solutions Corporation (ZWS) generated $316.6M 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.
Zurn Elkay Water Solutions Corporation (ZWS) spent $29.9M 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, Zurn Elkay Water Solutions Corporation (ZWS) returned $63.9M to shareholders via cash dividends and spent $159.9M on share repurchases. This shows the company's commitment to returning capital to its equity investors.