Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved versus both the prior quarter and the same quarter last year, driven by higher operating cash flow. The free cash flow margin strengthened sequentially and remained above the year-ago level.
- Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow rose sharply from the prior quarter and also exceeded the year-ago figure, while capital expenditure was modestly higher than the prior quarter but lower than a year ago. The resulting free cash flow and free cash flow margin both improved sequentially and year-over-year.
- Compared to the prior quarter, free cash flow increased as operating cash flow rose more than the increase in capital expenditure. Compared to the same quarter last year, free cash flow also increased, driven by higher operating cash flow and slightly lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$553.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$160.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$178.8M
Cash generated by operations before capital spending.
CapEx
$18.5M
Capital spending and related asset purchases.
FCF margin
17.1%
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 | $936.1M | $176.7M | $19.4M | $157.3M | 16.8% |
| 2023-03-31 | $966.4M | $119.9M | $10.7M | $109.2M | 11.3% |
| 2023-06-30 | $960.8M | $140.3M | $13.5M | $126.8M | 13.2% |
| 2023-09-30 | $937.5M | $178.8M | $18.5M | $160.3M | 17.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 118.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | $151.4M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger operating cash flow
Operating cash flow was the strongest observable driver, rising from both the prior quarter and the year-ago quarter. This directly lifted free cash flow despite a modest sequential increase in capital expenditure.
Higher operating cash flow was the primary factor behind the improvement in free cash flow and free cash flow margin.
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 quarter but higher than a year ago. Operating cash flow rose sharply from the prior quarter and also exceeded the year-ago figure, while capital expenditure was modestly higher than the prior quarter but lower than a year ago. The resulting free cash flow and free cash flow margin both improved sequentially and year-over-year.
Compared to the prior quarter, free cash flow increased as operating cash flow rose more than the increase in capital expenditure. Compared to the same quarter last year, free cash flow also increased, driven by higher operating cash flow and slightly lower capital expenditure.
Monitor the allowance for credit losses, which was slightly lower than the prior year-end, as changes in expected credit losses could affect operating cash flow.