Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned negative as operating cash flow was substantially lower while capital expenditure rose versus the prior quarter. The free cash flow margin weakened compared to both the immediately preceding quarter and the same quarter one year ago.
- Revenue declined from both the prior quarter and the year-ago quarter, while operating cash flow was sharply lower than the prior quarter but improved from the year-ago quarter. Capital expenditure increased relative to the prior quarter but was slightly lower than the year-ago quarter, leading to a negative free cash flow and a weakened margin.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all moved lower. Compared to the same quarter one year earlier, revenue was lower while operating cash flow improved, but free cash flow remained negative with a similar margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$429.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$22.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$19.3M
Cash generated by operations before capital spending.
CapEx
$41.4M
Capital spending and related asset purchases.
FCF margin
-3.6%
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 | $840.8M | $115.5M | $45.7M | $69.7M | 8.3% |
| 2022-10-02 | $827.1M | $271.6M | $38.9M | $232.7M | 28.1% |
| 2022-12-31 | $731.8M | $183.4M | $34.6M | $148.8M | 20.3% |
| 2023-04-02 | $617.5M | $19.3M | $41.4M | -$22.1M | -3.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -26.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.7% | 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 contraction
Operating cash flow was substantially lower than the prior quarter, driven by changes in operating assets and liabilities that used cash, as described in the filing context. This was the strongest observable driver of the negative free cash flow.
The weakened cash conversion directly resulted in negative free cash flow despite a capital expenditure level comparable to the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from both the prior quarter and the year-ago quarter, while operating cash flow was sharply lower than the prior quarter but improved from the year-ago quarter. Capital expenditure increased relative to the prior quarter but was slightly lower than the year-ago quarter, leading to a negative free cash flow and a weakened margin.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all moved lower. Compared to the same quarter one year earlier, revenue was lower while operating cash flow improved, but free cash flow remained negative with a similar margin.
Monitor the sharp decline in operating cash flow relative to the prior quarter, particularly given the decrease in accrued employee compensation and deferred revenue noted in the filing.