Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Pentair's first-quarter free cash flow turned deeply negative, driven by a substantial shortfall in operating cash flow despite stable revenue. The cash conversion weakened sharply compared with both the prior quarter and the same quarter last year, reflecting typical seasonal cash usage.
- Revenue remained stable from the prior quarter and the year-ago quarter, yet operating cash flow swung from positive to negative, causing free cash flow to turn negative at a wider margin. Capital expenditure was slightly lower than the prior quarter but higher than a year ago, amplifying the cash conversion decline.
- Relative to the prior quarter, operating cash flow and free cash flow both weakened significantly, with free cash flow margin dropping from positive to negative. Compared with the same quarter last year, free cash flow was also lower, though the year-ago period was already negative.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$715.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$85.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$67.4M
Cash generated by operations before capital spending.
CapEx
$18.5M
Capital spending and related asset purchases.
FCF margin
-8.3%
The share of revenue converted into free cash flow.
TTM FCF yield
6.9%
TTM FCF divided by market capitalization.
FCF reconciliation
Free cash flow is not a GAAP line item; it should be bridged from the cash flow statement.
| Operating cash flow | -$67.4M | Cash generated by operations before capital spending. |
| Capital expenditures | $18.5M | Capital spending used to bridge CFO to FCF. |
| Free cash flow | -$85.9M | Operating cash flow less capital spending. |
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-06-30 | $1.1B | $306.8M | $22.4M | $284.4M | 26.7% |
| 2022-09-30 | $1.1B | $95.2M | $23.1M | $72.1M | 6.8% |
| 2022-12-31 | $1.0B | $92.8M | $22.0M | $70.8M | 7.1% |
| 2023-03-31 | $1.0B | -$106.6M | $16.6M | -$123.2M | -12.0% |
| 2023-06-30 | $1.1B | $445.1M | $18.8M | $426.3M | 39.4% |
| 2023-09-30 | $1.0B | $162.2M | $19.4M | $142.8M | 14.2% |
| 2023-12-31 | $984.6M | $118.5M | $21.2M | $97.3M | 9.9% |
| 2024-03-31 | $1.0B | -$107.6M | $19.3M | -$126.9M | -12.5% |
| 2024-06-30 | $1.1B | $539.2M | $17.0M | $522.2M | 47.5% |
| 2024-09-30 | $993.4M | $248.6M | $15.4M | $233.2M | 23.5% |
| 2024-12-31 | $972.9M | $86.5M | $22.7M | $63.8M | 6.6% |
| 2025-03-31 | $1.0B | -$38.9M | $16.8M | -$55.7M | -5.5% |
| 2025-06-30 | $1.1B | $606.6M | $10.9M | $595.7M | 53.0% |
| 2025-09-30 | $1.0B | $196.3M | $17.4M | $178.9M | 17.5% |
| 2025-12-31 | $1.0B | $50.8M | $23.7M | $27.1M | 2.7% |
| 2026-03-31 | $1.0B | -$67.4M | $18.5M | -$85.9M | -8.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -49.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Seasonal operating cash flow swing
The primary observable driver was the large negative swing in operating cash flow, which moved from a positive amount in the prior quarter to a negative amount, and was also worse than the negative level a year ago. Filing context notes consistent seasonal cash usage in the first quarter.
This seasonal cash outflow directly caused free cash flow to turn negative and widened the negative margin compared with both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained stable from the prior quarter and the year-ago quarter, yet operating cash flow swung from positive to negative, causing free cash flow to turn negative at a wider margin. Capital expenditure was slightly lower than the prior quarter but higher than a year ago, amplifying the cash conversion decline.
Relative to the prior quarter, operating cash flow and free cash flow both weakened significantly, with free cash flow margin dropping from positive to negative. Compared with the same quarter last year, free cash flow was also lower, though the year-ago period was already negative.
Monitor whether operating cash flow reverses to positive in the second quarter, as seasonal patterns described in the filing suggest a return to significant cash generation.
Valuation context
A cash-flow page should show how much investors are paying for the cash stream, without turning into a full DCF.
| Market capitalization | $10.4B | Used as the denominator for FCF yield. |
| TTM FCF yield | 6.9% | TTM free cash flow divided by market capitalization. |
| EV / TTM FCF | 17.1x | A quick valuation bridge, not a full DCF. |
Peer context
Free cash flow quality is easier to read against related public companies.
Risks and tripwires
Observable signals that would weaken the free cash flow thesis.
| Risk | Tripwire | Why it matters |
|---|---|---|
| FCF margin compression | FCF margin falls for two consecutive quarters. | Cash conversion may be weakening before earnings show it. |
| Capital intensity rises | CapEx/revenue moves materially above the recent run rate. | More operating cash flow would be consumed before becoming FCF. |
| Working capital drag | Inventory or receivables grow faster than revenue. | Reported growth may not translate into cash. |