Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's cash conversion weakened sharply relative to both the prior quarter and the same quarter last year, driven by a lower operating cash flow despite higher revenue. The free cash flow margin contracted significantly, indicating reduced efficiency in converting sales into free cash.
- Revenue was higher than both the preceding quarter and the year-ago quarter, yet operating cash flow was lower, yielding a much lower free cash flow and a meaningfully smaller free cash flow margin. Capital expenditure was moderate relative to operating cash flow, but the decline in cash generation from operations was the primary factor in the weaker conversion.
- Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$783.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$48.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$60.0M
Cash generated by operations before capital spending.
CapEx
$12.0M
Capital spending and related asset purchases.
FCF margin
4.3%
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 | $839.7M | $242.6M | $8.3M | $234.3M | 27.9% |
| 2022-09-30 | $927.6M | $253.6M | $14.1M | $239.5M | 25.8% |
| 2022-12-31 | $901.0M | $281.2M | $19.6M | $261.6M | 29.0% |
| 2023-03-31 | $1.1B | $60.0M | $12.0M | $48.0M | 4.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 20.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Weaker Operating Cash Flow
Operating cash flow was substantially lower than the prior quarter and the year-ago quarter, even though revenue was higher. This was the strongest observable driver of the decline in free cash flow and the contraction in free cash flow margin.
The weakened operating cash flow directly reduced free cash flow and compressed the free cash flow margin, making cash conversion less efficient this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the year-ago quarter, yet operating cash flow was lower, yielding a much lower free cash flow and a meaningfully smaller free cash flow margin. Capital expenditure was moderate relative to operating cash flow, but the decline in cash generation from operations was the primary factor in the weaker conversion.
Compared to the immediately preceding quarter, revenue improved while operating cash flow, free cash flow, and free cash flow margin all declined. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were lower.
Monitor whether operating cash flow recovers in the coming quarters, as its decline was the main factor behind the weakened cash conversion and reduced free cash flow margin.