Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter compared to a negative result one year earlier, but the margin weakened significantly from the prior quarter. Revenue remained stable while operational cash conversion declined.
- Revenue was broadly unchanged, but operating cash flow decreased substantially, pulling free cash flow lower. Capital expenditure remained negligible, so the drop in free cash flow margin was driven entirely by the lower operating cash flow relative to revenue.
- Compared to the immediate prior quarter, free cash flow and its margin both weakened, as operating cash flow fell while revenue was flat. Versus the same quarter one year earlier, free cash flow improved sharply from a negative position to a positive one, and the margin turned from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$970.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$120.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$125.0M
Cash generated by operations before capital spending.
CapEx
$5.0M
Capital spending and related asset purchases.
FCF margin
12.7%
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 |
|---|---|---|---|---|---|
| 2022-12-30 | $936.0M | $306.0M | $1.0M | $305.0M | 32.6% |
| 2023-03-31 | $926.0M | $324.0M | $1.0M | $323.0M | 34.9% |
| 2023-06-30 | $943.0M | $226.0M | $4.0M | $222.0M | 23.5% |
| 2023-09-29 | $945.0M | $125.0M | $5.0M | $120.0M | 12.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 81.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.9B | 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 decline
The most observable driver this quarter was a significant reduction in operating cash flow compared to the prior quarter, while revenue held steady. This shift directly caused free cash flow and its margin to weaken.
If operating cash flow does not recover, free cash flow margin may remain under pressure despite stable revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was broadly unchanged, but operating cash flow decreased substantially, pulling free cash flow lower. Capital expenditure remained negligible, so the drop in free cash flow margin was driven entirely by the lower operating cash flow relative to revenue.
Compared to the immediate prior quarter, free cash flow and its margin both weakened, as operating cash flow fell while revenue was flat. Versus the same quarter one year earlier, free cash flow improved sharply from a negative position to a positive one, and the margin turned from negative to positive.
Monitor future trends in operating cash flow, as the sequential decline was the primary factor behind the margin compression.