Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened versus both the prior quarter and the same quarter last year, driven by lower operating cash flow. Revenue was stable, but the free cash flow margin contracted.
- Operating cash flow of two hundred thirty-seven million dollars converted into free cash flow of two hundred three million dollars after capital expenditure of thirty-four million dollars, yielding a free cash flow margin of fourteen point four percent.
- Compared to the prior quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher, resulting in a weakened free cash flow margin. Versus the same quarter one year earlier, operating cash flow and free cash flow were also lower, with capital expenditure essentially stable, leading to a similar weakening in margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$394.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$203.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$237.7M
Cash generated by operations before capital spending.
CapEx
$34.1M
Capital spending and related asset purchases.
FCF margin
14.4%
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 |
|---|---|---|---|---|---|
| 2022-04-03 | $1.3B | -$216.7M | $21.0M | -$237.7M | -18.0% |
| 2022-07-03 | $1.4B | $196.9M | $20.8M | $176.1M | 13.0% |
| 2022-10-02 | $1.4B | $268.9M | $16.7M | $252.2M | 18.5% |
| 2023-01-01 | $1.4B | $237.7M | $34.1M | $203.6M | 14.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 89.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.3B | 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 was the strongest observable driver of the free cash flow decrease, as it fell from both the prior quarter and the year-ago quarter, while capital expenditure showed mixed movement.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow of two hundred thirty-seven million dollars converted into free cash flow of two hundred three million dollars after capital expenditure of thirty-four million dollars, yielding a free cash flow margin of fourteen point four percent.
Compared to the prior quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher, resulting in a weakened free cash flow margin. Versus the same quarter one year earlier, operating cash flow and free cash flow were also lower, with capital expenditure essentially stable, leading to a similar weakening in margin.
Monitor the trajectory of operating cash flow, as it declined sequentially and year-over-year while revenue remained flat.