Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative in the quarter, significantly weaker than the prior quarter and slightly worse than the same quarter last year. The decline was driven by a substantial decrease in operating cash flow relative to the prior quarter.
- Revenue declined compared with both the prior quarter and the year-ago period, while operating cash flow turned more negative sequentially. Capital expenditure was lower, but the drop in operating cash flow outweighed the reduction, resulting in a wider free cash flow deficit and a lower margin.
- Compared with the immediately preceding quarter, free cash flow weakened sharply, driven by a large decrease in operating cash flow and a decline in revenue. Versus the same quarter one year earlier, free cash flow was slightly weaker, with revenue lower but operating cash flow and capital expenditure both moderately improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$241.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$114.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$109.8M
Cash generated by operations before capital spending.
CapEx
$4.9M
Capital spending and related asset purchases.
FCF margin
-13.0%
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 |
|---|---|---|---|---|---|
| 2023-07-29 | $1.2B | -$109.1M | $10.1M | -$119.2M | -10.2% |
| 2023-10-28 | $1.1B | $19.1M | $8.0M | $11.1M | 1.0% |
| 2024-02-03 | $1.8B | -$11.0M | $7.7M | -$18.7M | -1.0% |
| 2024-05-04 | $881.8M | -$109.8M | $4.9M | -$114.7M | -13.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 355.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | 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 Deterioration
Operating cash flow turned more negative from the prior quarter, driving the free cash flow shortfall. The decline occurred even as revenue fell, suggesting cash conversion weakened sequentially.
The weakened operating cash flow is the strongest observable driver of the quarter's free cash flow decline.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined compared with both the prior quarter and the year-ago period, while operating cash flow turned more negative sequentially. Capital expenditure was lower, but the drop in operating cash flow outweighed the reduction, resulting in a wider free cash flow deficit and a lower margin.
Compared with the immediately preceding quarter, free cash flow weakened sharply, driven by a large decrease in operating cash flow and a decline in revenue. Versus the same quarter one year earlier, free cash flow was slightly weaker, with revenue lower but operating cash flow and capital expenditure both moderately improved.
Monitor whether operating cash flow can narrow its deficit in upcoming quarters, as it is the primary factor influencing free cash flow.