Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter after a negative prior quarter, but was lower than the same quarter a year ago. The free cash flow margin improved from the prior quarter yet weakened compared to the year-ago period.
- Revenue was stable compared to the year-ago quarter and slightly higher than the prior quarter. Operating cash flow became positive, enabling positive free cash flow, whereas the prior quarter had negative operating cash flow. Capital expenditure was higher than both prior periods, yet free cash flow margin remained positive.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow improved significantly from negative to positive. Compared to the same quarter one year earlier, operating cash flow, free cash flow, and free cash flow margin were all lower.
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
$575.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$654.3M
Cash generated by operations before capital spending.
CapEx
$78.7M
Capital spending and related asset purchases.
FCF margin
29.2%
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 | $1.9B | $866.4M | $34.7M | $831.7M | 42.9% |
| 2022-12-31 | $2.0B | -$256.3M | $27.4M | -$283.7M | -14.4% |
| 2023-03-31 | $1.9B | -$73.3M | $15.4M | -$88.7M | -4.6% |
| 2023-06-30 | $2.0B | $654.3M | $78.7M | $575.6M | 29.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 253.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.0% | 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 recovery
Operating cash flow turned positive this quarter after being negative in the prior quarter, reflecting a change in cash generation. This reversal was the key factor behind the positive free cash flow.
The recovery in operating cash flow drove free cash flow positive, but it remained below the year-ago level, indicating a need for sustained improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the year-ago quarter and slightly higher than the prior quarter. Operating cash flow became positive, enabling positive free cash flow, whereas the prior quarter had negative operating cash flow. Capital expenditure was higher than both prior periods, yet free cash flow margin remained positive.
Compared to the immediately preceding quarter, operating cash flow and free cash flow improved significantly from negative to positive. Compared to the same quarter one year earlier, operating cash flow, free cash flow, and free cash flow margin were all lower.
Monitor the trajectory of operating cash flow, as the filing notes that for the nine-month period, operating cash flow decreased due to higher net purchases of investments by CIPs, lower net income, and higher accrued compensation payments.