Cash flow generation remains highly volatile, evidenced by a wide range in the operating cash flow to net income ratio from 0.38 in 2024Q1 to 3.58 in 2024Q4.
| Cash from Operations | 850M | 700M | 939M | 799M | 858M | 2.46B | 2.19B | 2.77B | 3.69B |
| Operating CF Margin % | - | 11.26% | 14.67% | 12.76% | 13.9% | 38.99% | 33.48% | 35.58% | 37.71% |
| Operating CF Growth % | 189.65% | -25.45% | 17.52% | -6.88% | -65.09% | 12.39% | -20.96% | -24.95% | - |
| Net Income | 246M | 187M | 864M | 1.02B | 917M | 1.35B | 2.26B | 3.31B | 2.15B |
| Depreciation & Amortization | 506.86M | 361M | 277M | 236M | 212M | 195M | 142M | 333M | 1.67B |
| Stock-Based Compensation | 53M | 77M | 105M | 101M | 75M | 59M | 40M | 41M | 56M |
| Deferred Taxes | 73M | 63M | -160M | -485M | -18M | -288M | -32M | 12M | 37M |
| Other Non-Cash Items | 99.14M | 259M | 131M | 79M | 124M | 439M | -22M | -253M | -58M |
| Working Capital Changes | -128M | -247M | -278M | -155M | -452M | 702M | -197M | -672M | -174M |
| Change in Receivables | 99M | 79M | 383M | -212M | -123M | -277M | 159M | 200M | 250M |
| Change in Inventory | -25M | -13M | -131M | -230M | -220M | -138M | -29M | -91M | 44M |
| Change in Payables | -76M | -217M | -157M | 163M | -237M | 663M | 27M | -35M | 20M |
| Cash from Investing | 168M | -390M | -513M | -260M | -420M | -481M | -258M | -102M | -69M |
| Capital Expenditures | -459.85M | -192M | -351M | -259M | -427M | -488M | -278M | -92M | -101M |
| CapEx % of Revenue | 7.46% | 3.09% | 5.48% | 4.14% | 6.92% | 7.74% | 4.26% | 1.18% | 1.03% |
| Acquisitions | 283.15M | -198M | -166M | -2M | -124M | -185M | 5M | 7M | 32M |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | 344.7M | 0 | 4M | 1M | 131M | 192M | 15M | -17M | 32M |
| Cash from Financing | -524M | -561M | -368M | -569M | -433M | -1.33B | -2.17B | -2.62B | -4.16B |
| Debt Issued (Net) | -487M | -458M | -11M | -258M | -108M | 7.85B | 1.51B | 0 | 59M |
| Equity Issued (Net) | -13M | 0 | -22M | -17M | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | -22M | -88M | -297M | -294M | -290M | -145M | 0 | 0 | 0 |
| Share Repurchases | -13M | 0 | -22M | -17M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -2M | -15M | -38M | 0 | -35M | -9.03B | -3.69B | -2.62B | -4.22B |
| Net Change in Cash | 569M | -101M | -18M | -13M | -31M | 667M | -249M | 75M | -527M |
| Free Cash Flow | 614M | 538M | 588M | 538M | 431M | 1.97B | 1.91B | 2.67B | 3.59B |
| FCF Margin % | 9.96% | 8.66% | 9.18% | 8.59% | 6.98% | 31.25% | 29.23% | 34.4% | 36.68% |
| FCF Growth % | 2.16% | -8.5% | 9.29% | 24.83% | -78.12% | 3.2% | -28.64% | -25.4% | - |
| FCF per Share | 2.34 | 2.06 | 2.27 | 2.10 | 1.69 | 7.77 | 7.53 | 10.57 | 14.17 |
| FCF Conversion (FCF/Net Income) | 2.50x | 3.74x | 1.09x | 0.78x | 0.94x | 1.82x | 1.01x | 0.86x | 1.71x |
| Interest Paid | 193M | 0 | 0 | 495M | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
High Debt Service Burden
As reported in quarterly financial filings, OGN's operating cash flow to net income ratio has exhibited extreme volatility, ranging from a low of 0.38 in 2024Q1 to a high of 3.58 in 2024Q4, indicating a disconnect between accounting profits and actual cash generation.
The wide variance in the OCF/NI ratio suggests that reported net income is heavily influenced by non-cash charges and accounting adjustments rather than core operational performance. Investors should monitor whether this divergence persists, as it complicates the assessment of the company's true ability to fund its debt obligations from recurring operations.
Based on the provided cash flow data, OGN's free cash flow margin has fluctuated significantly, swinging from a negative 1.5% in 2025Q1 to a peak of 19.8% in 2023Q4, reflecting the inherent instability in the company's ability to retain cash after capital expenditures.
This erratic FCF trajectory implies that the company's cash-generating capacity is highly sensitive to working capital swings and periodic spikes in capital intensity. The inability to maintain a consistent FCF margin suggests that the business model may struggle to provide a reliable cushion for deleveraging in periods of operational stress.
According to recent financial statements, OGN's capital expenditure as a percentage of revenue reached a high of 17.2% in 2025Q4, which significantly exceeds the typical maintenance levels observed in earlier periods, suggesting a potential shift toward more intensive investment requirements.
The elevated capex in late 2025 may indicate either necessary infrastructure upgrades for complex manufacturing or a strategic pivot toward growth-oriented projects. Analysts should investigate whether this increased capital intensity is sustainable given the company's constrained net margins and the ongoing pressure to reduce debt.
Financial data reveals that working capital changes have been a major source of cash flow volatility, with a significant $301 million outflow in 2024Q2 contrasting sharply with a $225 million inflow in 2023Q4, highlighting the unpredictable nature of the company's cash conversion cycle.
These large swings in working capital suggest potential inefficiencies in inventory management or the timing of collections from international markets. Such instability in the cash conversion cycle warrants further investigation, as it may be masking underlying operational challenges in the Established Brands segment.
As reported in recent filings, OGN has prioritized significant cash outflows for acquisitions, such as the $433 million spent in 2026Q1, while simultaneously managing dividend payments, which appears to place additional strain on the company's limited liquidity position.
The decision to pursue aggressive acquisitions despite a high debt-to-equity ratio suggests a management strategy focused on inorganic growth to offset legacy portfolio declines. Investors should monitor whether these capital deployments provide sufficient returns to justify the continued reliance on external financing or cash reserves.
Quick answers to the most common questions about buying OGN stock.
Organon & Co. (OGN) generated $700.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Organon & Co. (OGN) generated $538.0M 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.
Organon & Co. (OGN) spent $192.0M 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, Organon & Co. (OGN) returned $88.0M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.