Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved compared to the same quarter last year but weakened from the prior quarter. The cash conversion margin followed a similar pattern, with operating cash flow and free cash flow both higher year-over-year but lower sequentially.
- Operating cash flow was higher than the year-ago quarter but lower than the prior quarter. Capital expenditure was slightly lower than the prior quarter and higher than the year-ago quarter. The resulting free cash flow margin improved year-over-year but weakened sequentially. The filing notes that operating cash flow for the first half of the year was favorably impacted by lower incentive compensation payouts and the timing of accounts payable payments.
- Compared to the prior quarter, revenue increased while operating cash flow decreased, leading to a lower free cash flow margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved slightly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$195.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$351.0M
Cash generated by operations before capital spending.
CapEx
$156.0M
Capital spending and related asset purchases.
FCF margin
4.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $3.6B | $290.0M | $161.0M | $129.0M | 3.6% |
| 2022-12-31 | $3.7B | $439.0M | $61.0M | $378.0M | 10.1% |
| 2023-03-31 | $2.4B | $479.0M | $172.0M | $307.0M | 12.6% |
| 2023-06-30 | $4.8B | $351.0M | $156.0M | $195.0M | 4.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -138.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | 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.
Revenue Growth
Revenue was higher than both the prior quarter and the same quarter last year.
This revenue increase contributed to a higher free cash flow compared to the year-ago quarter, partially offsetting the sequential decline in cash conversion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was higher than the year-ago quarter but lower than the prior quarter. Capital expenditure was slightly lower than the prior quarter and higher than the year-ago quarter. The resulting free cash flow margin improved year-over-year but weakened sequentially. The filing notes that operating cash flow for the first half of the year was favorably impacted by lower incentive compensation payouts and the timing of accounts payable payments.
Compared to the prior quarter, revenue increased while operating cash flow decreased, leading to a lower free cash flow margin. Compared to the same quarter last year, revenue, operating cash flow, and free cash flow were all higher, and the free cash flow margin improved slightly.
Monitor the direction of operating cash flow relative to revenue, as it declined sequentially despite higher revenue.