Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The filing noted that cash flow results benefited from strong sales and progress on initiatives, yet the quarter's free cash flow margin weakened compared to both the prior quarter and the year-ago period. Revenue was lower than the preceding quarter but higher than the same quarter one year earlier, while free cash flow decreased relative to both periods.
- Operating cash flow as a proportion of revenue declined, and capital expenditure increased, leading to a lower free cash flow margin. The gap between operating cash flow and capital expenditure narrowed, reducing cash available after investments.
- Compared to the preceding quarter, revenue was lower, operating cash flow and free cash flow were substantially lower, and capital expenditure was higher. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were all lower, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$209.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$354.5M
Cash generated by operations before capital spending.
CapEx
$144.8M
Capital spending and related asset purchases.
FCF margin
5.7%
The share of revenue converted into free cash flow.
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 |
|---|---|---|---|---|---|
| 2022-02-12 | $3.4B | $361.8M | $105.9M | $255.9M | 7.6% |
| 2022-05-07 | $3.9B | $843.4M | $161.2M | $682.2M | 17.6% |
| 2022-11-19 | $4.0B | $793.6M | $114.4M | $679.2M | 17.0% |
| 2023-02-11 | $3.7B | $354.5M | $144.8M | $209.6M | 5.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 44.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating cash flow contraction
Operating cash flow decreased more than the change in revenue, pulling down free cash flow. Capital expenditure also rose, compounding the compression of free cash flow margin.
Future cash conversion will depend on whether operating cash flow recovers toward historical levels relative to revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue declined, and capital expenditure increased, leading to a lower free cash flow margin. The gap between operating cash flow and capital expenditure narrowed, reducing cash available after investments.
Compared to the preceding quarter, revenue was lower, operating cash flow and free cash flow were substantially lower, and capital expenditure was higher. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were all lower, while capital expenditure was higher.
Monitor the trajectory of operating cash flow, given its sharp decline from the prior quarter and its slight dip versus the year-ago period.