Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Vertex Pharmaceuticals Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income (loss)	(535,600)	3,619,600)	3,322,000)	2,342,100)	2,711,647)
Stock-based compensation expense	698,500)	581,200)	491,300)	441,400)	429,461)
Depreciation and amortization expenses	207,200)	181,300)	148,300)	125,600)	109,515)
Deferred income taxes	(348,800)	(536,500)	(275,900)	(154,600)	277,341)
(Gains) losses on equity securities	57,700)	600)	149,100)	(17,100)	(311,937)
Increase (decrease) in fair value of contingent consideration	(500)	(51,600)	(57,500)	(3,100)	13,100)
Other non-cash items, net	(56,300)	8,400)	11,800)	14,400)	78,832)
Accounts receivable, net	(99,300)	(84,100)	(358,600)	(274,700)	(223,444)
Inventories	(517,300)	(322,900)	(136,400)	(92,800)	(132,014)
Prepaid expenses and other assets	(200,300)	(545,700)	(326,400)	(91,800)	(297,562)
Accounts payable	49,500)	48,700)	120,800)	31,900)	51,276)
Accrued expenses	212,900)	429,400)	542,500)	305,400)	122,198)
Other liabilities	39,700)	208,900)	498,900)	16,800)	425,092)
Changes in operating assets and liabilities	(514,800)	(265,700)	340,800)	(105,200)	(54,454)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	43,000)	(82,300)	807,900)	301,400)	541,858)
Net cash provided by (used in) operating activities	(492,600)	3,537,300)	4,129,900)	2,643,500)	3,253,505)
Purchases of available-for-sale debt securities	(7,438,200)	(3,786,500)	(692,700)	(528,200)	(431,396)
Sales and maturities of available-for-sale debt securities	4,465,600)	839,100)	920,000)	499,300)	372,342)
Purchases of property and equipment	(297,700)	(200,400)	(204,700)	(235,000)	(259,798)
Sale of equity securities	—)	95,100)	—)	—)	437,567)
Net payments related to finite-lived intangible assets	(187,700)	(58,000)	—)	—)	—)
Acquisition of available-for-sale debt securities from Alpine Immune Sciences, Inc.	(258,000)	—)	—)	—)	—)
Payment to acquire ViaCyte, Inc., net of cash acquired	—)	—)	(295,900)	—)	—)
Other investing activities	(54,000)	(31,000)	(47,800)	(77,000)	(19,327)
Net cash (used in) provided by investing activities	(3,770,000)	(3,141,700)	(321,100)	(340,900)	99,388)
Issuances of common stock under benefit plans	114,600)	134,600)	186,300)	102,000)	264,946)
Repurchases of common stock	(1,177,100)	(427,600)	—)	(1,425,400)	(539,136)
Payments in connection with common stock withheld for employee tax obligations	(405,000)	(226,100)	(172,000)	(135,900)	(200,271)
Payments on finance leases	(33,600)	(44,900)	(85,500)	(47,000)	(42,275)
Proceeds from finance leases	—)	—)	—)	22,600)	13,251)
Other financing activities	6,200)	1,800)	3,500)	5,700)	(1,796)
Net cash used in financing activities	(1,494,900)	(562,200)	(67,700)	(1,478,000)	(505,281)
Effect of changes in exchange rates on cash	(42,600)	26,900)	(29,200)	(13,400)	20,552)
Net increase (decrease) in cash, cash equivalents and restricted cash	(5,800,100)	(139,700)	3,711,900)	811,200)	2,868,164)
Cash, cash equivalents and restricted cash, beginning of period	10,372,300)	10,512,000)	6,800,100)	5,988,900)	3,120,681)
Cash, cash equivalents and restricted cash, end of period	4,572,200)	10,372,300)	10,512,000)	6,800,100)	5,988,845)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

The financial data reveals several significant trends and changes over the five-year period from 2020 to 2024. Net income experienced fluctuations, starting with a strong positive result in 2020 through 2023, peaking at approximately 3.6 billion US dollars in 2023, followed by a sharp reversal to a sizable loss of about 535.6 million US dollars in 2024. This indicates considerable volatility in profitability, with 2024 marking a notable downturn.

Stock-based compensation expense showed a consistent upward trajectory, rising steadily from roughly 429 thousand US dollars in 2020 to nearly 699 thousand US dollars in 2024. Similarly, depreciation and amortization expenses increased annually, reflecting ongoing investments in capital assets or amortizable intangibles, growing from about 110 thousand to 207 thousand US dollars over the period.

The deferred income taxes line exhibited considerable volatility, transitioning from a positive figure of 277 thousand US dollars in 2020 to negative values in the subsequent years, reaching -536 thousand US dollars in 2023 before a slight improvement in 2024. Gains and losses on equity securities fluctuated notably, with a significant gain recorded in 2020, followed by minor losses and gains in the subsequent years, suggesting variable returns from equity holdings.

Operating asset and liability changes were highly variable, with negative figures in most years indicating cash outflows from operations related to working capital adjustments, except for a positive change in 2022. Adjustments reconciling net income to operating cash flows showed irregular patterns, with a marked dip into negative territory in 2023 but a slight recovery in 2024.

Net cash from operating activities demonstrated robust positive cash generation from 2020 to 2023, peaking near 4.1 billion US dollars in 2022, before declining sharply to a negative cash flow of approximately 493 thousand US dollars in 2024. Cash flows from investing activities shifted dramatically over time, with relatively modest inflows or outflows until 2022, followed by substantial cash outflows in 2023 and 2024, including significant purchases of available-for-sale debt securities—showing increased investment activity or strategic asset acquisitions in the later years.

Financing activities also exhibited volatility. Repurchases of common stock were significant, especially in 2021 and 2024, suggesting active capital return strategies. Issuances of common stock under benefit plans declined moderately over the timeframe. Payments related to employee tax obligations consistently increased, reflecting possibly higher required withholdings. Overall, net cash used in financing activities was markedly negative in 2021 and 2024.

The cash position reflected these operational, investing, and financing dynamics. Cash and equivalents grew substantially from 2020 through 2022, peaking at over 10.5 billion US dollars by the end of 2022. However, there was a notable decrease in 2023 and a steep decline in 2024, ending at approximately 4.6 billion US dollars. This decline corresponds with the negative net cash flow figures in both operating and investing activities during 2024.

Profitability: Strong from 2020 to 2023 but deteriorated sharply into a loss in 2024.
Operating Expenses: Continued growth in stock-based compensation and depreciation/amortization indicates increasing non-cash expenses and capital investments.
Deferred Taxes: Fluctuated with a notable decline into negative territory after 2020, impacting cash flows.
Cash Flows from Operations: Positive and growing until 2023, then reversed to negative in 2024.
Investing Activities: Increasing outflows in later years, particularly large purchases of debt securities indicating strategic asset accumulation.
Financing Activities: Substantial stock repurchases and increasing tax-related payments and overall cash outflows highlight active capital management and employee-related cash uses.
Liquidity: Cash balances increased markedly until 2022 but declined sharply in 2023 and 2024, reflecting shifts in cash generation and investment.

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Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Cash Flow Statement