Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin declined from both the prior quarter and the same quarter one year earlier, driven by lower operating cash flow. Revenue was lower sequentially but higher year-over-year, while capital expenditure decreased from the prior quarter.
- Cash conversion weakened as operating cash flow fell more than revenue, resulting in a lower free cash flow margin. Capital expenditure was reduced from the prior quarter but remained above the year-ago level.
- Compared to the prior quarter, free cash flow and margin were lower due to a larger decline in operating cash flow relative to revenue. Versus the same quarter one year earlier, free cash flow and margin also decreased, despite higher revenue, as operating cash flow was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$555.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$89.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$98.9M
Cash generated by operations before capital spending.
CapEx
$9.8M
Capital spending and related asset purchases.
FCF margin
9.6%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $915.4M | $208.7M | $6.4M | $202.3M | 22.1% |
| 2023-06-30 | $993.6M | $142.4M | $12.6M | $129.8M | 13.1% |
| 2023-09-29 | $957.3M | $147.1M | $13.2M | $133.9M | 14.0% |
| 2023-12-29 | $932.4M | $98.9M | $9.8M | $89.1M | 9.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 141.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.8B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weaker Operating Cash Flow
Operating cash flow decreased from both the prior quarter and the same quarter one year earlier, leading to a lower free cash flow margin. The filing notes that for the full year, operating cash flow benefited from lower inventory purchases and reduced bonus payouts, but faced headwinds from deferred revenue timing and higher interest payments.
The lower operating cash flow constrained free cash flow generation despite reduced capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow fell more than revenue, resulting in a lower free cash flow margin. Capital expenditure was reduced from the prior quarter but remained above the year-ago level.
Compared to the prior quarter, free cash flow and margin were lower due to a larger decline in operating cash flow relative to revenue. Versus the same quarter one year earlier, free cash flow and margin also decreased, despite higher revenue, as operating cash flow was lower.
Monitor the trajectory of operating cash flow, particularly the impact of deferred revenue timing and higher interest payments as noted in the filing.