Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared with both the prior quarter and the same quarter a year ago, but operating cash flow declined sharply, resulting in a negative free cash flow margin. Cash conversion weakened significantly from the prior quarter and was also lower than the year-ago period.
- Revenue was higher than the prior quarter and the year-ago quarter, yet operating cash flow decreased, leading to free cash flow that was negative and a negative free cash flow margin. The filing context indicates that the decline in operating cash flow was primarily due to higher working capital, partially offset by improved operating results.
- Compared with the immediately preceding quarter, revenue was higher while free cash flow shifted from positive to negative and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue was higher but free cash flow was more negative and the margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$506.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$41.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$23.0M
Cash generated by operations before capital spending.
CapEx
$64.0M
Capital spending and related asset purchases.
FCF margin
-2.6%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $1.4B | $158.0M | $44.0M | $114.0M | 8.2% |
| 2022-09-30 | $1.4B | $65.0M | $42.0M | $23.0M | 1.6% |
| 2022-12-31 | $1.5B | $455.0M | $45.0M | $410.0M | 27.1% |
| 2023-03-31 | $1.6B | $23.0M | $64.0M | -$41.0M | -2.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -27.7% | 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.
Working capital impact
According to the filing, operating cash flow decreased primarily due to higher working capital, including unfavorable changes in accounts payable and receivables, partially offset by favorable changes in inventories, accrued expenses, taxes, and prepaid expenses.
This working capital shift was the strongest observable factor behind the decline in free cash flow relative to both the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the year-ago quarter, yet operating cash flow decreased, leading to free cash flow that was negative and a negative free cash flow margin. The filing context indicates that the decline in operating cash flow was primarily due to higher working capital, partially offset by improved operating results.
Compared with the immediately preceding quarter, revenue was higher while free cash flow shifted from positive to negative and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue was higher but free cash flow was more negative and the margin was lower.
Monitor the trajectory of working capital components, particularly accounts payable and receivables, as they were cited as unfavorable factors in the operating cash flow change.