Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The current quarter's free cash flow and margin were lower than the prior quarter but higher than the same quarter a year ago. The sequential decline in revenue and operating cash flow drove the weakening in free cash flow margin.
- Operating cash flow exceeded capital expenditure, yielding positive free cash flow. The resulting free cash flow margin was lower than the prior quarter and higher than the year-ago quarter.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Compared to the same quarter one year earlier, all metrics increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$246.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$250.0M
Cash generated by operations before capital spending.
CapEx
$4.0M
Capital spending and related asset purchases.
FCF margin
11.0%
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 | $820.0M | $557.0M | $4.0M | $553.0M | 67.4% |
| 2022-09-30 | $1.4B | $666.0M | $4.0M | $662.0M | 47.0% |
| 2022-12-31 | $3.1B | $631.0M | $3.0M | $628.0M | 20.2% |
| 2023-03-31 | $2.2B | $250.0M | $4.0M | $246.0M | 11.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 109.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | $166.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sequential revenue decline
Revenue decreased from the prior quarter, and operating cash flow decreased more than proportionally, leading to a lower free cash flow margin.
The free cash flow margin weakened sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure, yielding positive free cash flow. The resulting free cash flow margin was lower than the prior quarter and higher than the year-ago quarter.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Compared to the same quarter one year earlier, all metrics increased.
Monitor the trend in operating cash flow, as it is the primary component of free cash flow given relatively stable capital expenditure.