Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and its margin improved from the same quarter one year earlier, but weakened from the preceding quarter. The current quarter's cash generation was notably higher than the weak performance in the prior-year period.
- Revenue was slightly lower than the prior-year quarter but higher than the preceding quarter. Operating cash flow increased substantially from the year-ago quarter, though it decreased from the previous quarter. Capital expenditure was lower than both comparative periods, resulting in free cash flow that was higher than a year ago but lower than the prior quarter.
- Compared to the preceding quarter, free cash flow and its margin were lower, driven by a decrease in operating cash flow and a reduction in capital expenditure. Relative to the same quarter one year earlier, free cash flow and its margin were significantly higher, reflecting a large improvement in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$426.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$109.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$119.9M
Cash generated by operations before capital spending.
CapEx
$10.7M
Capital spending and related asset purchases.
FCF margin
11.3%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $965.9M | $37.9M | $17.8M | $20.1M | 2.1% |
| 2022-09-30 | $874.2M | $160.3M | $20.2M | $140.1M | 16.0% |
| 2022-12-31 | $936.1M | $176.7M | $19.4M | $157.3M | 16.8% |
| 2023-03-31 | $966.4M | $119.9M | $10.7M | $109.2M | 11.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | $65.4M | 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 Recovery
Operating cash flow in the current quarter was substantially higher than the same quarter last year, when it was unusually low. This recovery was the primary factor behind the improvement in free cash flow and margin relative to the year-ago period.
The higher operating cash flow drove free cash flow and margin well above the prior-year quarter's levels.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior-year quarter but higher than the preceding quarter. Operating cash flow increased substantially from the year-ago quarter, though it decreased from the previous quarter. Capital expenditure was lower than both comparative periods, resulting in free cash flow that was higher than a year ago but lower than the prior quarter.
Compared to the preceding quarter, free cash flow and its margin were lower, driven by a decrease in operating cash flow and a reduction in capital expenditure. Relative to the same quarter one year earlier, free cash flow and its margin were significantly higher, reflecting a large improvement in operating cash flow.
The company disclosed that its allowance for credit losses increased from the prior quarter, and that revenue is subject to variable consideration from customer rebates and expected product returns, which could affect reported revenue and cash flows.