Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was negative for the quarter, reflecting typical seasonal working capital outflows. The deficit narrowed compared to the same quarter last year but widened from the prior quarter.
- Revenue was stable relative to the year-ago quarter, while operating cash flow improved, indicating higher cash conversion. However, operating cash flow decreased from the prior quarter, and capital expenditure increased, contributing to a negative free cash flow margin.
- Compared to the immediately preceding quarter, revenue and operating cash flow both declined, turning free cash flow from positive to negative. Versus the same quarter one year earlier, revenue was stable while operating cash flow improved, resulting in a smaller free cash flow deficit.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$210.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$114.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$78.8M
Cash generated by operations before capital spending.
CapEx
$35.4M
Capital spending and related asset purchases.
FCF margin
-10.9%
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 | $97.1M | $20.9M | $76.2M | 5.6% |
| 2022-09-30 | $1.2B | $170.9M | $20.3M | $150.6M | 12.1% |
| 2022-12-31 | $1.1B | $132.2M | $34.1M | $98.1M | 9.0% |
| 2023-03-31 | $1.0B | -$78.8M | $35.4M | -$114.2M | -10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -116.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | 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 buildup
The company's cash flow was affected by the typical seasonal increase in working capital, as noted in the management discussion. Operating cash flow was negative, consistent with the pattern of higher working capital requirements early in the year.
The extent to which working capital reverses in subsequent quarters will determine the recovery of free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable relative to the year-ago quarter, while operating cash flow improved, indicating higher cash conversion. However, operating cash flow decreased from the prior quarter, and capital expenditure increased, contributing to a negative free cash flow margin.
Compared to the immediately preceding quarter, revenue and operating cash flow both declined, turning free cash flow from positive to negative. Versus the same quarter one year earlier, revenue was stable while operating cash flow improved, resulting in a smaller free cash flow deficit.
Monitor the evolution of operating cash flow as the company's seasonal working capital needs typically peak in the first half of the year.