Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened in the first quarter of fiscal 2023 compared with both the prior quarter and the same quarter a year earlier. The decline was driven by lower operating cash flow despite stable revenue relative to the year-ago period.
- Revenue was stable compared with a year earlier, but operating cash flow was lower, leading to a lower free cash flow margin. Capital expenditure was higher than the year-ago quarter, further reducing free cash flow.
- Compared with the immediately preceding quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin were all lower. Compared with the same quarter a year earlier, revenue was stable, but operating cash flow, free cash flow, and free cash flow margin were lower, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$101.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$163.0M
Cash generated by operations before capital spending.
CapEx
$62.0M
Capital spending and related asset purchases.
FCF margin
3.3%
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 |
|---|---|---|---|---|---|
| 2022-07-02 | $3.2B | $372.0M | $66.0M | $306.0M | 9.7% |
| 2022-10-01 | $3.1B | $348.0M | $78.0M | $270.0M | 8.8% |
| 2022-12-31 | $3.6B | $527.0M | $162.0M | $365.0M | 10.0% |
| 2023-04-01 | $3.0B | $163.0M | $62.0M | $101.0M | 3.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 52.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | 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 Decline
Operating cash flow was lower than both the prior quarter and the year-ago quarter, despite revenue being stable year over year. This was the strongest observable driver of the weakened free cash flow.
Lower operating cash flow directly reduced free cash flow and the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared with a year earlier, but operating cash flow was lower, leading to a lower free cash flow margin. Capital expenditure was higher than the year-ago quarter, further reducing free cash flow.
Compared with the immediately preceding quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin were all lower. Compared with the same quarter a year earlier, revenue was stable, but operating cash flow, free cash flow, and free cash flow margin were lower, while capital expenditure was higher.
Monitor the trend in operating cash flow, as its decline was the primary factor behind the weakened free cash flow.