Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter ended March 31, 2023 showed a positive free cash flow margin for Deckers Outdoor Corporation, a notable improvement from the same quarter one year earlier when the margin was negative. Revenue remained stable compared to the prior year quarter, while operating cash flow shifted from negative to positive.
- Revenue generation supported a positive operating cash flow, which after capital expenditure yielded a free cash flow with a low single-digit margin. The conversion from revenue to free cash was modest, as operating cash flow was a fraction of revenue.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin were all lower. However, versus the same quarter one year earlier, operating cash flow and free cash flow improved from negative to positive, while revenue was higher and the margin strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$456.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$34.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$59.5M
Cash generated by operations before capital spending.
CapEx
$25.0M
Capital spending and related asset purchases.
FCF margin
4.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $614.5M | -$28.9M | $12.5M | -$41.4M | -6.7% |
| 2022-09-30 | $875.6M | -$207.9M | $11.8M | -$219.7M | -25.1% |
| 2022-12-31 | $1.3B | $714.7M | $31.8M | $682.9M | 50.8% |
| 2023-03-31 | $791.6M | $59.5M | $25.0M | $34.6M | 4.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 37.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.2% | 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.
Year-over-Year Cash Flow Recovery
Free cash flow turned from negative in the prior year same quarter to positive in the current period, driven by operating cash flow improvement. The margin moved from negative to a positive low single-digit level.
The shift to positive free cash flow and margin compared to the prior year quarter represents a fundamental change in cash generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue generation supported a positive operating cash flow, which after capital expenditure yielded a free cash flow with a low single-digit margin. The conversion from revenue to free cash was modest, as operating cash flow was a fraction of revenue.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin were all lower. However, versus the same quarter one year earlier, operating cash flow and free cash flow improved from negative to positive, while revenue was higher and the margin strengthened.
Monitor operating cash flow sustainability given its sequential decline from a high level in the prior quarter.