Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow improved sequentially despite lower revenue, driving a higher free cash flow margin. Compared with the same quarter last year, free cash flow margin weakened as operating cash flow was lower.
- Revenue was lower than the prior quarter but higher than the year-ago quarter. Operating cash flow rose sequentially, supported by lower capital expenditure, resulting in a higher free cash flow and an improved margin versus the prior quarter.
- Compared with the previous quarter, free cash flow and margin improved due to higher operating cash flow and lower capital expenditure. Relative to the same quarter a year ago, free cash flow margin was lower, as operating cash flow was higher in the prior year.
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
$648.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$650.0M
Cash generated by operations before capital spending.
CapEx
$2.0M
Capital spending and related asset purchases.
FCF margin
35.8%
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 | $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% |
| 2023-09-30 | $1.8B | $650.0M | $2.0M | $648.0M | 35.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -654.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | $109.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sequential Operating Cash Flow Improvement
Operating cash flow increased from the prior quarter while revenue decreased, which is the strongest observable driver of the quarter's free cash flow improvement. Capital expenditure also declined, further supporting free cash flow.
This driver lifted free cash flow margin compared with the prior quarter, despite a lower revenue base.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but higher than the year-ago quarter. Operating cash flow rose sequentially, supported by lower capital expenditure, resulting in a higher free cash flow and an improved margin versus the prior quarter.
Compared with the previous quarter, free cash flow and margin improved due to higher operating cash flow and lower capital expenditure. Relative to the same quarter a year ago, free cash flow margin was lower, as operating cash flow was higher in the prior year.
Monitor whether operating cash flow can sustain its sequential improvement given the concurrent decline in revenue.