Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's free cash flow turned negative in the current quarter, driven by operating cash flow that was significantly lower than both the prior quarter and the same quarter last year. Revenue was slightly lower than the prior quarter and stable compared to the year-ago quarter.
- Operating cash flow was substantially lower than revenue, resulting in a negative free cash flow margin. Capital expenditure exceeded operating cash flow, further contributing to the negative free cash flow.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were sharply lower, while revenue also decreased. Versus the same quarter one year earlier, operating cash flow and free cash flow were lower, with revenue remaining relatively stable.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$428.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$4.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$27.0M
Cash generated by operations before capital spending.
CapEx
$31.0M
Capital spending and related asset purchases.
FCF margin
-0.1%
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 |
|---|---|---|---|---|---|
| 2022-06-25 | $3.0B | $157.0M | $24.0M | $133.0M | 4.4% |
| 2022-09-24 | $3.1B | $98.0M | $24.0M | $74.0M | 2.4% |
| 2022-12-31 | $3.4B | $254.0M | $29.0M | $225.0M | 6.7% |
| 2023-04-01 | $3.1B | $27.0M | $31.0M | -$4.0M | -0.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -3.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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.
Seasonal working capital build
The filing notes that working capital requirements typically increase from the end of the third quarter through the end of the first quarter of the following year due to sales seasonality and inventory forward buy-in opportunities.
This seasonal pattern contributed to the lower operating cash flow and 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.
Operating cash flow was substantially lower than revenue, resulting in a negative free cash flow margin. Capital expenditure exceeded operating cash flow, further contributing to the negative free cash flow.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were sharply lower, while revenue also decreased. Versus the same quarter one year earlier, operating cash flow and free cash flow were lower, with revenue remaining relatively stable.
Monitor whether the seasonal working capital build reverses in the coming quarters as indicated in the filing context.