Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased sequentially and year-over-year, but operating cash flow declined sharply from the prior quarter, resulting in a lower free cash flow. The current quarter's free cash flow margin weakened compared to the prior quarter yet improved relative to the same quarter last year.
- Operating cash flow as a percentage of revenue decreased from the prior quarter, while capital expenditure was higher, leading to a lower free cash flow margin. The conversion of revenue into free cash flow was weaker than the prior quarter.
- Compared to the immediately preceding quarter, free cash flow and margin were lower, while revenue was slightly higher. Relative to the same quarter one year earlier, all metrics improved, with free cash flow and margin significantly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$980.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$248.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$326.0M
Cash generated by operations before capital spending.
CapEx
$78.0M
Capital spending and related asset purchases.
FCF margin
6.3%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $3.7B | -$98.0M | $39.0M | -$137.0M | -3.7% |
| 2023-06-30 | $3.8B | $164.0M | $40.0M | $124.0M | 3.3% |
| 2023-09-29 | $3.9B | $795.0M | $50.0M | $745.0M | 19.1% |
| 2023-12-29 | $4.0B | $326.0M | $78.0M | $248.0M | 6.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 108.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | 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.
Weakened cash conversion efficiency
Operating cash flow fell sharply from the prior quarter even as revenue rose, causing a substantial drop in free cash flow margin.
This constrained free cash flow generation despite higher revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue decreased from the prior quarter, while capital expenditure was higher, leading to a lower free cash flow margin. The conversion of revenue into free cash flow was weaker than the prior quarter.
Compared to the immediately preceding quarter, free cash flow and margin were lower, while revenue was slightly higher. Relative to the same quarter one year earlier, all metrics improved, with free cash flow and margin significantly higher.
Monitor the trend in operating cash flow relative to revenue, given the large sequential decline.