Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned deeply negative this quarter, driven by a large operating cash outflow. Revenue was stable versus a year ago but operating cash flow weakened significantly from both the prior quarter and the same quarter last year.
- Revenue was unchanged from a year earlier, yet operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure was slightly higher than a year ago but lower than the prior quarter, though the cash conversion was primarily affected by the operating cash outflow.
- Compared to the prior quarter, operating cash flow and free cash flow both turned from positive to negative, and the free cash flow margin dropped sharply. Versus the same quarter a year ago, operating cash flow and free cash flow were lower, while revenue was stable and capital expenditure was slightly higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$281.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$92.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$76.0M
Cash generated by operations before capital spending.
CapEx
$16.0M
Capital spending and related asset purchases.
FCF margin
-6.5%
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 | $1.5B | $100.0M | $17.0M | $83.0M | 5.7% |
| 2022-10-01 | $1.4B | $67.0M | $20.0M | $47.0M | 3.4% |
| 2022-12-31 | $1.5B | $267.0M | $24.0M | $243.0M | 16.2% |
| 2023-04-01 | $1.4B | -$76.0M | $16.0M | -$92.0M | -6.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -61.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.0B | 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 Swing
Operating cash flow moved from a positive amount in both the prior quarter and the year-ago quarter to a negative amount this quarter. This swing is the strongest observable driver of the free cash flow change, as capital expenditure was relatively stable.
The negative operating cash flow directly caused free cash flow to turn deeply negative, despite revenue being stable.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged from a year earlier, yet operating cash flow shifted from positive to negative, resulting in a negative free cash flow margin. Capital expenditure was slightly higher than a year ago but lower than the prior quarter, though the cash conversion was primarily affected by the operating cash outflow.
Compared to the prior quarter, operating cash flow and free cash flow both turned from positive to negative, and the free cash flow margin dropped sharply. Versus the same quarter a year ago, operating cash flow and free cash flow were lower, while revenue was stable and capital expenditure was slightly higher.
Monitor whether operating cash flow returns to positive levels in the coming quarter, as the current negative swing is the primary factor behind the free cash flow deficit.