Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The current quarter's free cash flow was negative as capital expenditure exceeded operating cash flow. Sequentially, free cash flow and margin weakened, but they improved slightly compared to the same quarter one year earlier.
- Revenue was substantial, but operating cash flow was modest relative to revenue, and capital expenditure surpassed operating cash flow, resulting in negative free cash flow and a negative margin.
- Compared to the preceding quarter, revenue was higher but operating cash flow was lower and capital expenditure was higher, causing free cash flow to turn from positive to negative and margin to weaken. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was higher, capital expenditure was higher, and free cash flow and margin improved modestly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$174.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$28.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$30.4M
Cash generated by operations before capital spending.
CapEx
$58.9M
Capital spending and related asset purchases.
FCF margin
-2.4%
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 |
|---|---|---|---|---|---|
| 2022-09-25 | $1.7B | $114.4M | $54.9M | $59.5M | 3.6% |
| 2022-12-25 | $1.7B | $110.7M | $2.5M | $108.2M | 6.4% |
| 2023-04-02 | $1.0B | $88.8M | $53.2M | $35.6M | 3.6% |
| 2023-07-02 | $1.2B | $30.4M | $58.9M | -$28.5M | -2.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.9% | 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.
Sequential Operating Cash Flow Weakening
Operating cash flow was lower than in the preceding quarter, while capital expenditure was higher. This shift was the primary observable change leading to negative free cash flow.
The lower operating cash flow relative to the prior quarter was the strongest driver of the negative free cash flow in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was substantial, but operating cash flow was modest relative to revenue, and capital expenditure surpassed operating cash flow, resulting in negative free cash flow and a negative margin.
Compared to the preceding quarter, revenue was higher but operating cash flow was lower and capital expenditure was higher, causing free cash flow to turn from positive to negative and margin to weaken. Compared to the same quarter one year earlier, revenue was lower but operating cash flow was higher, capital expenditure was higher, and free cash flow and margin improved modestly.
Monitor the potential impact of ongoing writers' and actors' strikes on the entertainment segment, as noted in the company's risk factors.