Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, improving from a negative position a year ago, though it decreased sharply from the prior quarter. The cash conversion rate weakened sequentially as operating cash flow fell more than revenue.
- Revenue was lower than the prior quarter, while operating cash flow declined more steeply, resulting in a lower free cash flow margin. Capital expenditure also decreased, but the drop in operating cash flow was the primary factor in the weaker cash conversion.
- Compared to the prior quarter, all cash flow metrics were lower and the margin weakened. Versus the same quarter last year, revenue was higher and cash flows improved from negative to positive, with a higher margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$643.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$71.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$112.4M
Cash generated by operations before capital spending.
CapEx
$40.8M
Capital spending and related asset purchases.
FCF margin
4.7%
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 |
|---|---|---|---|---|---|
| 2022-07-02 | $1.6B | $236.8M | $18.8M | $218.0M | 13.4% |
| 2022-10-01 | $1.5B | -$170.4M | $27.3M | -$197.7M | -13.1% |
| 2022-12-31 | $2.0B | $632.8M | $81.5M | $551.3M | 27.2% |
| 2023-04-01 | $1.5B | $112.4M | $40.8M | $71.6M | 4.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 38.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.0B | 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 Volatility
Operating cash flow shifted from a large positive in the prior quarter to a much smaller positive this quarter, and was negative a year ago. This volatility is the strongest observable driver of free cash flow changes.
The sharp sequential decline in operating cash flow directly reduced free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter, while operating cash flow declined more steeply, resulting in a lower free cash flow margin. Capital expenditure also decreased, but the drop in operating cash flow was the primary factor in the weaker cash conversion.
Compared to the prior quarter, all cash flow metrics were lower and the margin weakened. Versus the same quarter last year, revenue was higher and cash flows improved from negative to positive, with a higher margin.
Monitor whether operating cash flow can sustain its positive level relative to revenue in upcoming quarters.