Liquidity remains a critical risk, as the company's cash balance fell to $9.5 million in 2026Q1, struggling to offset the impact of stock-based compensation that reached as high as $9.6 million in a single quarter.
| Cash from Operations | -12.93M | -15.97M | -37.17M | -34.58M | -30.65M | -17.19M | -4.49M | -7.67M |
| Operating CF Margin % | - | -7.51% | -17.75% | -18.48% | -21.61% | -18.21% | -7.83% | -19.47% |
| Operating CF Growth % | 82.82% | 57.03% | -7.5% | -12.81% | -78.26% | -282.58% | 41.43% | - |
| Net Income | -61.04M | -59M | -55.74M | -49.53M | -42.81M | -20.55M | -3.67M | -4.26M |
| Depreciation & Amortization | 9.1M | 10.5M | 8.42M | 5.35M | 2.13M | 685K | 1.21M | 793K |
| Stock-Based Compensation | 25.13M | 33.82M | 30.6M | 17.35M | 8.11M | 3.41M | 919K | 815K |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 419K | 2.14M | 0 |
| Other Non-Cash Items | 11.58M | 7.29M | 4.99M | 1.99M | 7.73M | 176K | 221K | 292K |
| Working Capital Changes | 2.3M | -8.58M | -25.43M | -9.74M | -5.81M | -1.33M | -5.32M | -5.31M |
| Change in Receivables | 306K | -2.09M | -5.69M | -9.3M | -11.04M | -4.23M | -4.29M | -6.02M |
| Change in Inventory | 1.57M | 3.22M | -10.01M | -9.85M | -8.77M | -3.09M | -3.4M | -2.81M |
| Change in Payables | 4.17M | -3.8M | -1.31M | 3.17M | 4.61M | 1.79M | 1.33M | -236K |
| Cash from Investing | 7.33M | 13.25M | 35.38M | -81.3M | -76.52M | -2.71M | -1.07M | -1.21M |
| Capital Expenditures | -13.04M | -13.52M | -11.59M | -11.46M | -14.84M | -2.71M | -1.07M | -1.21M |
| CapEx % of Revenue | 6.29% | 6.36% | 5.54% | 6.12% | 10.46% | 2.86% | 1.86% | 3.07% |
| Acquisitions | 0 | 0 | 0 | -20M | 61.68M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 11.54M | 0 | 0 | 0 | -61.68M | 0 | 0 | 0 |
| Cash from Financing | 1.78M | 2.08M | 160K | 109.38M | 20.81M | 107.65M | 11.5M | 19.74M |
| Debt Issued (Net) | 1.81M | 2.43M | 0 | 0 | 19.61M | -1.79M | 11.32M | 20M |
| Equity Issued (Net) | -135K | 546K | 428K | 109.4M | 2.19M | 109.44M | 364K | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -412K | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 106K | -902K | -268K | -13K | -989K | 0 | -179K | -261K |
| Net Change in Cash | -3.83M | -642K | -1.63M | -6.49M | -86.36M | 87.75M | 5.94M | 10.86M |
| Free Cash Flow | -25.97M | -29.49M | -48.76M | -46.03M | -45.49M | -19.9M | -5.56M | -8.88M |
| FCF Margin % | -12.53% | -13.86% | -23.29% | -24.6% | -32.07% | -21.07% | -9.7% | -22.54% |
| FCF Growth % | 29.73% | 39.53% | -5.92% | -1.2% | -128.6% | -257.68% | 37.38% | - |
| FCF per Share | -0.40 | -0.47 | -0.79 | -0.76 | -0.82 | -0.37 | -0.11 | -0.17 |
| FCF Conversion (FCF/Net Income) | 0.43x | 0.27x | 0.67x | 0.70x | 0.72x | 0.84x | 1.23x | 1.80x |
| Interest Paid | 1.26M | 0 | 0 | 0 | 0 | 0 | 0 | 739K |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Liquidity and capital exhaustion
According to historical cash flow statements, TMCI exhibits a persistent disconnect between net losses and operating cash flow, with the OCF/NI ratio frequently fluctuating into negative territory, suggesting that reported earnings are not currently supported by underlying cash generation from core surgical kit sales.
The recurring gap between net income and operating cash flow highlights the heavy reliance on non-cash adjustments, particularly stock-based compensation, to mask operational deficits. Investors should monitor whether this reliance on accruals indicates a structural inability to convert revenue into actual liquidity under the current high-cost sales model.
As reported in financial statements, TMCI's free cash flow trajectory remains highly erratic, with negative margins reaching as low as -35.2% in 2024Q2, indicating that the company has yet to achieve the scale necessary to self-fund its intensive clinical education and direct sales infrastructure.
The sporadic nature of positive FCF quarters appears to be driven more by working capital timing than by sustainable operational improvements. This volatility suggests that the company remains vulnerable to cash flow shocks, especially given the lack of consistent margin expansion in recent periods.
Based on TMCI's reported figures, working capital changes have acted as a significant, albeit inconsistent, source of cash, including a $14.7 million inflow in 2026Q1 that temporarily obscured the underlying cash burn inherent in the company's current medical device manufacturing and distribution operations.
These large swings in working capital suggest that inventory management and accounts receivable cycles are highly sensitive to sales volume fluctuations. Analysts should be wary of interpreting these periodic inflows as a sign of operational maturity, as they appear to be transient rather than structural.
Financial data reveals that stock-based compensation consistently ranges between $6.7 million and $9.6 million per quarter, effectively acting as a significant non-cash expense that prevents the cash flow statement from reflecting the true economic cost of talent acquisition and retention within the organization.
By adding back these substantial SBC amounts, the company presents a more favorable cash flow picture than the underlying business performance warrants. This practice warrants further investigation into the long-term dilution impact on shareholders and whether the current compensation structure is aligned with actual cash-generative growth.
Quick answers to the most common questions about buying TMCI stock.
Treace Medical Concepts, Inc. (TMCI) generated $-16.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Treace Medical Concepts, Inc. (TMCI) reported negative free cash flow of $29.5M in 2025, indicating capital requirements exceeded cash from operations.
Treace Medical Concepts, Inc. (TMCI) spent $13.5M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.