Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than the prior quarter and the year-ago quarter, while free cash flow margin improved compared to both periods. Operating cash flow increased year over year but decreased slightly from the prior quarter.
- Operating cash flow exceeded revenue, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. Capital expenditure was higher than the prior quarter and the year-ago quarter, partially offsetting the strong operating cash flow.
- Compared to the prior quarter, revenue was lower and free cash flow was slightly lower, but free cash flow margin improved. Compared to the year-ago quarter, revenue was lower, while operating cash flow, free cash flow, and free cash flow margin were all higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$191.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$365.0M
Cash generated by operations before capital spending.
CapEx
$174.0M
Capital spending and related asset purchases.
FCF margin
46.1%
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 | $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% |
| 2023-09-30 | $414.0M | $365.0M | $174.0M | $191.0M | 46.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 7.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 42.0% | 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 Strength
Operating cash flow was higher than the year-ago quarter and nearly matched the prior quarter despite lower revenue. The filing notes that cash from operations in the first nine months was favorably impacted by lower annual payouts under employee incentive compensation plans and the timing of accounts payable payments.
This supported a free cash flow margin that was higher than both the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded revenue, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. Capital expenditure was higher than the prior quarter and the year-ago quarter, partially offsetting the strong operating cash flow.
Compared to the prior quarter, revenue was lower and free cash flow was slightly lower, but free cash flow margin improved. Compared to the year-ago quarter, revenue was lower, while operating cash flow, free cash flow, and free cash flow margin were all higher.
Monitor the trend in capital expenditure relative to operating cash flow, as it increased from both the prior quarter and the year-ago quarter.