Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined compared to both the prior quarter and the same quarter last year, yet operating cash flow and free cash flow improved substantially. The free cash flow margin rose sharply, reflecting stronger cash conversion despite lower top-line performance.
- Operating cash flow increased relative to the preceding quarter and the year-ago period, while capital expenditure was lower than the prior quarter but higher than the year-ago quarter. The resulting free cash flow and free cash flow margin both improved, indicating a more efficient conversion of revenue into cash.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin were higher. Versus the same quarter one year earlier, revenue was lower, operating cash flow and free cash flow were higher, capital expenditure was higher, and free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$540.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$365.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$390.7M
Cash generated by operations before capital spending.
CapEx
$24.9M
Capital spending and related asset purchases.
FCF margin
28.4%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-10-01 | $1.5B | $215.7M | $48.3M | $167.4M | 11.1% |
| 2023-12-31 | $1.3B | $390.7M | $24.9M | $365.8M | 28.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -34.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | 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.
Free Cash Flow Margin Expansion
The free cash flow margin rose substantially from the prior quarter and the year-ago period. This improvement was driven by a significant increase in operating cash flow, which more than offset the decline in revenue and the change in capital expenditure levels.
The stronger free cash flow margin enhances the company's financial flexibility, as noted in the filing that the company has historically generated significant cash from operations and used various funding sources.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased relative to the preceding quarter and the year-ago period, while capital expenditure was lower than the prior quarter but higher than the year-ago quarter. The resulting free cash flow and free cash flow margin both improved, indicating a more efficient conversion of revenue into cash.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was lower, and free cash flow and margin were higher. Versus the same quarter one year earlier, revenue was lower, operating cash flow and free cash flow were higher, capital expenditure was higher, and free cash flow margin improved.
Monitor whether the elevated operating cash flow can be sustained given the lower revenue base and the shift in production financing after the sale of eOne Film and TV.