Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and operating cash flow both declined versus the prior quarter and the year-ago quarter. The free cash flow margin narrowed, reflecting a lower proportion of revenue converted to free cash flow.
- Revenue was stable compared to the year-ago quarter but decreased from the prior quarter. Operating cash flow decreased relative to both periods, while capital expenditure was lower year over year but slightly higher sequentially. The combination resulted in lower free cash flow and a narrower free cash flow margin.
- Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all declined. Versus the year-ago quarter, revenue was steady, but operating cash flow and free cash flow were lower, and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$381.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$632.0M
Cash generated by operations before capital spending.
CapEx
$251.0M
Capital spending and related asset purchases.
FCF margin
12.2%
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 |
|---|---|---|---|---|---|
| 2022-07-03 | $3.3B | $819.0M | $268.0M | $551.0M | 16.6% |
| 2022-10-02 | $3.4B | $1.1B | $282.0M | $862.0M | 25.0% |
| 2022-12-31 | $3.3B | $1.1B | $233.0M | $843.0M | 25.5% |
| 2023-04-02 | $3.1B | $632.0M | $251.0M | $381.0M | 12.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 61.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.0% | 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.
Operating Cash Flow Weakness
Operating cash flow decreased both sequentially and year over year, while revenue was relatively stable versus the prior year and lower compared to the prior quarter. This divergence indicates a lower cash conversion efficiency on revenue.
The reduction in operating cash flow was the strongest observable driver of the decline in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the year-ago quarter but decreased from the prior quarter. Operating cash flow decreased relative to both periods, while capital expenditure was lower year over year but slightly higher sequentially. The combination resulted in lower free cash flow and a narrower free cash flow margin.
Compared to the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all declined. Versus the year-ago quarter, revenue was steady, but operating cash flow and free cash flow were lower, and the margin weakened.
Monitor the trajectory of operating cash flow, as its decline was the primary factor behind the reduction in free cash flow.