Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue, operating cash flow, and free cash flow all improved compared to the same quarter one year earlier. Versus the immediately preceding quarter, revenue was higher but operating cash flow and free cash flow were lower, leading to a slightly weakened free cash flow margin.
- Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure remained stable across all periods, so the change in free cash flow margin was driven primarily by the movement in operating cash flow.
- Compared to the immediately preceding quarter, revenue increased while operating cash flow and free cash flow decreased, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, all metrics improved, with free cash flow margin rising.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$926.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$302.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$316.0M
Cash generated by operations before capital spending.
CapEx
$13.8M
Capital spending and related asset purchases.
FCF margin
28.3%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $901.0M | $281.2M | $19.6M | $261.6M | 29.0% |
| 2023-03-31 | $1.1B | $60.0M | $12.0M | $48.0M | 4.3% |
| 2023-06-30 | $1.0B | $328.0M | $13.3M | $314.7M | 30.1% |
| 2023-09-30 | $1.1B | $316.0M | $13.8M | $302.2M | 28.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 171.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-Year Cash Flow Improvement
Operating cash flow and free cash flow were both substantially higher than the same quarter one year earlier, with free cash flow margin also improving. This was supported by higher revenue in the current quarter.
The year-over-year increase in free cash flow was the strongest observable driver of the quarter's performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure remained stable across all periods, so the change in free cash flow margin was driven primarily by the movement in operating cash flow.
Compared to the immediately preceding quarter, revenue increased while operating cash flow and free cash flow decreased, resulting in a lower free cash flow margin. Compared to the same quarter one year earlier, all metrics improved, with free cash flow margin rising.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite higher revenue.