Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the fourth fiscal quarter, the company achieved higher cash conversion from operations compared to the prior quarter, with free cash flow and margin both improving. However, relative to the same quarter a year ago, free cash flow was slightly lower and the margin narrowed, even as revenue increased. The company's liquidity and capital structure were reshaped by the Avast merger, with new credit facilities established and prior loans repaid.
- Revenue decreased sequentially but operating cash flow increased, leading to improved free cash flow and margin. Capital expenditure remained minimal and stable, supporting the conversion rate.
- Sequentially, free cash flow and margin improved as operating cash flow rose despite a slight decline in revenue. Year-over-year, revenue was higher but operating cash flow was marginally lower, resulting in a weaker free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$751.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$323.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$324.0M
Cash generated by operations before capital spending.
CapEx
$1.0M
Capital spending and related asset purchases.
FCF margin
34.9%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $707.0M | $215.0M | $2.0M | $213.0M | 30.1% |
| 2022-09-30 | $748.0M | -$88.0M | $2.0M | -$90.0M | -12.0% |
| 2022-12-30 | $936.0M | $306.0M | $1.0M | $305.0M | 32.6% |
| 2023-03-31 | $926.0M | $324.0M | $1.0M | $323.0M | 34.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 35.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$9.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sequential Operating Cash Flow Growth
Operating cash flow increased sequentially, driving higher free cash flow and an improved margin despite a slight dip in revenue.
This improvement strengthened the quarter's cash generation efficiency relative to the prior period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased sequentially but operating cash flow increased, leading to improved free cash flow and margin. Capital expenditure remained minimal and stable, supporting the conversion rate.
Sequentially, free cash flow and margin improved as operating cash flow rose despite a slight decline in revenue. Year-over-year, revenue was higher but operating cash flow was marginally lower, resulting in a weaker free cash flow margin.
Monitor whether operating cash flow can sustain its sequential improvement given the year-over-year decline in free cash flow margin.