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Watsco cash flow, quarter by quarter

Latest: Q3 2026 · from the cash-flow statements filed with the SEC

Free cash flow$315M in Q3 2026 · $666M over twelve months

Operating cash flow$325M
Capital spending−$9.7M
Free cash flow+$315M
Cash / net income1.8×
Cash conversion cycle111 days

Analysis

In Q3 2026, Watsco generated $325M of operating cash flow and spent $9.7M on capital projects, leaving free cash flow of $315M. That is $30.7M less than in Q3 2025 ($346M).

Over the twelve months to Sep 30, 2026, operating cash flow was $703M; the largest uses were dividends ($514M), partners ($62.4M), capital spending ($37.0M); besides operations, cash came from other investing ($57.3M), shares issued ($23.1M); the cash balance rose by $174M.

Operating cash flow was $325M against net income of $183M — 1.8× profit, cash ran ahead of reported earnings. The largest differences: receivables +$48.7M, inventory +$47.2M, payables +$43.5M.

Its cash conversion cycle was 111 days (receivables 43 + inventory 105 − payables 37).

Free cash flow

Watsco: free cash flow by quarterWatsco: free cash flow by quarter$371MQ4 2024−$185MQ1 2025−$14.3MQ2 2025$346MQ3 2025$388MQ4 2025−$25.9MQ1 2026−$11.5MQ2 2026$315MQ3 2026
Operating cash flow less capital spending.
Watsco: operating cash flow against capital spendingWatsco: operating cash flow against capital spendingOperating cash flowCapital spending$379M$8.0MQ4 2024−$178M$7.5MQ1 2025−$7.4M$6.8MQ2 2025$355M$8.9MQ3 2025$400M$11.3MQ4 2025−$18.9M$7.0MQ1 2026−$2.5M$9.0MQ2 2026$325M$9.7MQ3 2026
Latest (Q3 2026): Operating cash flow $325M, Capital spending $9.7M.

Capital allocation, year by year

Watsco: where the cash came from (up) and went (down), by fiscal yearWatsco: where the cash came from (up) and went (down), by fiscal yearOperating cash flowNet borrowingShares issuedAsset salesCapital spendingAcquisitionsDividendsFY2021: Operating cash flow $350MFY2021: Net borrowing $178MFY2021: Shares issued $42.0MFY2021: Asset sales $1.4MFY2021: Capital spending −$25.5MFY2021: Acquisitions −$129MFY2021: Dividends −$295M$571MFY2021FY2022: Operating cash flow $572MFY2022: Net borrowing −$65.2MFY2022: Shares issued $40.8MFY2022: Asset sales $1.9MFY2022: Capital spending −$35.7MFY2022: Acquisitions −$47KFY2022: Dividends −$332M$615MFY2022FY2023: Operating cash flow $562MFY2023: Net borrowing −$113MFY2023: Shares issued $44.3MFY2023: Asset sales $1.3MFY2023: Capital spending −$35.5MFY2023: Acquisitions −$3.8MFY2023: Dividends −$383M$608MFY2023FY2024: Operating cash flow $773MFY2024: Shares issued $313MFY2024: Asset sales $262KFY2024: Capital spending −$30.1MFY2024: Acquisitions −$5.2MFY2024: Dividends −$424M$1.1BFY2024FY2025: Operating cash flow $570MFY2025: Shares issued $24.8MFY2025: Asset sales $457KFY2025: Capital spending −$34.5MFY2025: Acquisitions −$19.2MFY2025: Dividends −$474M$595MFY2025
Over these 5 years operating cash flow totalled $2.8B; the largest uses were dividends ($1.9B) and net borrowing ($178M). Cash-flow statements as filed.

Cash runway and the debt wall

Cash & investments$649M
Debt$493M
Net cash$156M
Due within a year$124M

Watsco funds itself: free cash flow was $666M over the last twelve months, and $649M of cash and investments stands against $493M of debt ($124M due within a year, 5.2× covered by cash).

Where the cash came from and went

Watsco: sources (+) and uses (−) of cash, Q3 2026Watsco: sources (+) and uses (−) of cash, Q3 2026Operating cash flow$325MDividends−$136MCash drawn (+) / kept (−)−$135MOther investing−$50.0MCapital spending−$9.7MShares issued$3.7MOther financing$967KExchange rates$528KAsset & business sales$16K
Watsco: sources (+) and uses (−) of cash, TTM to Q3 2026Watsco: sources (+) and uses (−) of cash, TTM to Q3 2026Operating cash flow$703MDividends−$514MCash drawn (+) / kept (−)−$174MPartners−$62.4MOther investing$57.3MCapital spending−$37.0MShares issued$23.1MOther financing$6.2MTaxes on employees’ shares−$2.4MExchange rates−$448KAsset & business sales$155K

From profit to cash

Watsco: net income to operating cash flow, Q3 2026Watsco: net income to operating cash flow, Q3 2026Net income$183MDepreciation & amortization$12.0MStock-based pay$9.1MReceivables$48.7MInventory$47.2MPayables$43.5MOther operating capital−$13.8MOperating cash flow$325M
Non-cash charges are added back; money tied up in receivables or inventory is subtracted.
QuarterReceivable daysInventory daysPayable daysCash conversion cycle
Q3 20264310537111
Q2 20264110837111
Q1 20264812638136
Q4 20255111930140
Q3 20254410933119
Q2 20254011638118
Q1 20254912942136
Q4 20244810737117

Every quarter

QuarterOperating cash flowCapital spendingAcquisitionsDividendsNet borrowing (+) / repaid (−)Shares issuedCash drawn (+) / kept (−)Free cash flow
Q3 2026$325M−$9.7M—−$136M—$3.7M−$135M$315M
Q2 2026−$2.5M−$9.0M—−$134M—$8.5M$28.5M−$11.5M
Q1 2026−$18.9M−$7.0M—−$122M—$5.8M$40.6M−$25.9M
Q4 2025$400M−$11.3M$105K−$122M—$5.2M−$109M$388M
Q3 2025$355M−$8.9M$80K−$122M—$5.6M−$31.4M$346M
Q2 2025−$7.4M−$6.8M−$15.7M−$121M—$3.0M$139M−$14.3M
Q1 2025−$178M−$7.5M−$3.7M−$109M—$11.0M$94.4M−$185M
Q4 2024$379M−$8.0M—−$109M$15.4M$7.3M−$232M$371M

Watsco: income statement and cash flow

Watsco, Q3 2026: revenue $2.2B (+7% year over year), operating margin 10.1%. The chart follows the revenue to costs, profit and cash.

Watsco: every quarter, Q/Q and Y/Y → Open in the app

Read automatically from the company’s XBRL cash-flow statements; quarterly figures for the fourth quarter are the year less the first three. Errors are possible. Not investment advice.