Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially but weakened compared to the same quarter last year. The cash conversion margin was lower than the year-ago period despite higher revenue.
- Operating cash flow was substantially higher than capital expenditure, resulting in a free cash flow margin that was higher than the previous quarter but lower than the same quarter one year earlier.
- Compared to the prior quarter, revenue and operating cash flow both increased, leading to a higher free cash flow margin. Versus the same quarter last year, revenue was higher but operating cash flow was lower, causing a weakened free cash flow margin.
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
$571.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$575.0M
Cash generated by operations before capital spending.
CapEx
$4.0M
Capital spending and related asset purchases.
FCF margin
21.9%
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 | $1.4B | $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% |
| 2023-06-30 | $2.6B | $575.0M | $4.0M | $571.0M | 21.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 106.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$41.0M | 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 vs. Revenue
Revenue increased significantly from both the prior quarter and the year-ago quarter, but operating cash flow did not keep pace, particularly compared to the year-ago period. This divergence is the strongest observable driver of the change in free cash flow margin.
The lower operating cash flow relative to revenue compressed the free cash flow margin compared to 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 was substantially higher than capital expenditure, resulting in a free cash flow margin that was higher than the previous quarter but lower than the same quarter one year earlier.
Compared to the prior quarter, revenue and operating cash flow both increased, leading to a higher free cash flow margin. Versus the same quarter last year, revenue was higher but operating cash flow was lower, causing a weakened free cash flow margin.
Monitor the trend in operating cash flow relative to revenue, as the year-over-year decline in cash conversion suggests a shift in cash generation efficiency.