Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, free cash flow, and free cash flow margin all decreased compared to both the prior quarter and the same quarter last year. Capital expenditure was lower than the prior quarter but similar to the year-ago level.
- Operating cash flow as a percentage of revenue weakened, leading to a lower free cash flow margin. The conversion from revenue to free cash flow was less efficient than in either comparison period.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, all metrics were lower, with the free cash flow margin showing a notable decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$380.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$42.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$63.5M
Cash generated by operations before capital spending.
CapEx
$20.9M
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 |
|---|---|---|---|---|---|
| 2022-07-03 | $895.6M | $97.5M | $19.5M | $78.0M | 8.7% |
| 2022-10-02 | $711.8M | $160.0M | $13.0M | $146.9M | 20.6% |
| 2023-01-01 | $741.2M | $139.2M | $26.1M | $113.0M | 15.2% |
| 2023-04-02 | $674.9M | $63.5M | $20.9M | $42.5M | 6.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 7.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.1B | 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 Decline
Operating cash flow decreased sharply from both the prior quarter and the year-ago quarter, while capital expenditure was only slightly lower. This drove a significant reduction in free cash flow and margin.
The lower operating cash flow was the strongest observable driver of the weakened free cash flow generation this quarter.
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 weakened, leading to a lower free cash flow margin. The conversion from revenue to free cash flow was less efficient than in either comparison period.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, all metrics were lower, with the free cash flow margin showing a notable decline.
Monitor the trend in operating cash flow relative to revenue, as its decline was the primary factor behind the lower free cash flow margin.