Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened sharply from the prior quarter and was lower than the same quarter last year, driven by a steep decline in operating cash flow. Revenue was stable compared to the prior quarter and higher than a year ago, but the cash conversion rate dropped significantly.
- Operating cash flow as a proportion of revenue fell markedly, resulting in a free cash flow margin that was much lower than both the prior quarter and the year-ago quarter. Capital expenditure was higher than the prior quarter but lower than the same quarter last year, which further compressed free cash flow.
- Compared to the prior quarter, revenue was stable while operating cash flow, free cash flow, and free cash flow margin were all substantially lower. Versus the same quarter last year, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$608.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$13.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$46.9M
Cash generated by operations before capital spending.
CapEx
$33.4M
Capital spending and related asset purchases.
FCF margin
1.4%
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 | $943.1M | $199.9M | $64.1M | $135.8M | 14.4% |
| 2023-06-30 | $1.0B | $251.8M | $58.5M | $193.2M | 19.3% |
| 2023-09-30 | $960.2M | $287.2M | $21.6M | $265.6M | 27.7% |
| 2023-12-31 | $956.7M | $46.9M | $33.4M | $13.5M | 1.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 10.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.5% | 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 substantially lower than both the prior quarter and the year-ago quarter, despite revenue being stable sequentially and higher year over year. This divergence is the strongest observable driver of the free cash flow weakness.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin to its lowest level among the three periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue fell markedly, resulting in a free cash flow margin that was much lower than both the prior quarter and the year-ago quarter. Capital expenditure was higher than the prior quarter but lower than the same quarter last year, which further compressed free cash flow.
Compared to the prior quarter, revenue was stable while operating cash flow, free cash flow, and free cash flow margin were all substantially lower. Versus the same quarter last year, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower.
Monitor whether operating cash flow recovers toward historical levels, as the current quarter's level was the weakest among the three periods presented.