Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly compared to the same quarter last year, driven by higher operating cash flow and lower capital expenditure. The free cash flow margin strengthened versus the prior year but weakened relative to the preceding quarter.
- Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than the year-ago quarter but slightly lower than the prior quarter. Capital expenditure decreased compared to the year-ago quarter but increased from the prior quarter. Free cash flow and free cash flow margin improved substantially versus the year-ago quarter but declined from the prior quarter.
- Compared to the prior quarter, free cash flow and margin were lower, as operating cash flow decreased slightly and capital expenditure increased. Compared to the same quarter last year, free cash flow and margin were much higher, driven by a large increase in operating cash flow and a reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$866.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
$221.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$273.7M
Cash generated by operations before capital spending.
CapEx
$52.5M
Capital spending and related asset purchases.
FCF margin
16.7%
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 |
|---|---|---|---|---|---|
| 2022-09-24 | $1.1B | $154.1M | $50.1M | $104.0M | 9.1% |
| 2022-12-31 | $1.3B | $368.7M | $59.4M | $309.3M | 23.7% |
| 2023-04-01 | $1.1B | $279.2M | $46.8M | $232.4M | 20.3% |
| 2023-07-01 | $1.3B | $273.7M | $52.5M | $221.2M | 16.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 76.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | 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 Strength
Operating cash flow was substantially higher than the year-ago quarter, which was the primary driver of the improvement in free cash flow. The company's liquidity position remains strong, with ample cash and marketable securities.
The strong operating cash flow supported higher free cash flow and margin compared to the year-ago period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter. Operating cash flow was higher than the year-ago quarter but slightly lower than the prior quarter. Capital expenditure decreased compared to the year-ago quarter but increased from the prior quarter. Free cash flow and free cash flow margin improved substantially versus the year-ago quarter but declined from the prior quarter.
Compared to the prior quarter, free cash flow and margin were lower, as operating cash flow decreased slightly and capital expenditure increased. Compared to the same quarter last year, free cash flow and margin were much higher, driven by a large increase in operating cash flow and a reduction in capital expenditure.
Monitor the trend in capital expenditure, as it increased from the prior quarter and may affect future free cash flow conversion.