Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow increased sharply compared to the prior quarter and the same quarter last year, driving free cash flow and margin substantially higher. Revenue was stable sequentially but higher year over year.
- Revenue was unchanged sequentially, but operating cash flow rose sharply, resulting in a much higher free cash flow margin. Capital expenditure remained relatively stable, so the conversion improvement came entirely from the operating cash flow increase.
- Compared to the immediately preceding quarter, free cash flow and margin improved while revenue was stable. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing the largest relative gains.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$687.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$699.0M
Cash generated by operations before capital spending.
CapEx
$11.2M
Capital spending and related asset purchases.
FCF margin
45.6%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $1.3B | $40.5M | $10.5M | $30.0M | 2.4% |
| 2023-03-31 | $1.4B | $374.5M | $5.6M | $368.9M | 27.3% |
| 2023-06-30 | $1.5B | $434.1M | $11.6M | $422.5M | 29.0% |
| 2023-09-30 | $1.5B | $699.0M | $11.2M | $687.8M | 45.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 126.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | 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 Surge
Operating cash flow rose sharply compared to both the prior quarter and the year-ago quarter, even as revenue was flat sequentially. This was the primary factor behind the increase in free cash flow and margin.
The strong operating cash flow directly lifted free cash flow and margin, resulting in the highest cash conversion efficiency among the periods presented.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was unchanged sequentially, but operating cash flow rose sharply, resulting in a much higher free cash flow margin. Capital expenditure remained relatively stable, so the conversion improvement came entirely from the operating cash flow increase.
Compared to the immediately preceding quarter, free cash flow and margin improved while revenue was stable. Versus the same quarter one year earlier, all metrics were higher, with operating cash flow and free cash flow showing the largest relative gains.
Monitor whether operating cash flow can sustain its elevated level relative to revenue, given the sequential revenue stability.