Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow margin improved sequentially as operating cash flow rose while capital expenditure declined. However, compared to the same quarter last year, free cash flow and margin were lower, reflecting a weaker operating cash flow conversion.
- Revenue increased compared to the prior quarter, and operating cash flow grew at a faster pace, leading to a higher free cash flow margin. Capital expenditure was slightly lower than both the prior quarter and the year-ago period, contributing to the sequential improvement.
- Sequentially, free cash flow and margin both improved, driven by higher operating cash flow and lower capital expenditure. Year over year, free cash flow and margin decreased, as operating cash flow was significantly lower despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$247.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$285.7M
Cash generated by operations before capital spending.
CapEx
$38.2M
Capital spending and related asset purchases.
FCF margin
25.5%
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 | $883.6M | $316.2M | $43.8M | $272.4M | 30.8% |
| 2023-03-31 | $901.3M | $877.7M | $36.7M | $840.9M | 93.3% |
| 2023-06-30 | $948.2M | $221.3M | $42.2M | $179.1M | 18.9% |
| 2023-09-30 | $970.9M | $285.7M | $38.2M | $247.4M | 25.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 91.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Sequential improvement in cash conversion
Operating cash flow increased from the prior quarter while capital expenditure decreased, resulting in a higher free cash flow margin. The improvement in cash conversion efficiency is the strongest observable driver this quarter.
The higher free cash flow margin strengthens the company's liquidity position relative to the immediate prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to the prior quarter, and operating cash flow grew at a faster pace, leading to a higher free cash flow margin. Capital expenditure was slightly lower than both the prior quarter and the year-ago period, contributing to the sequential improvement.
Sequentially, free cash flow and margin both improved, driven by higher operating cash flow and lower capital expenditure. Year over year, free cash flow and margin decreased, as operating cash flow was significantly lower despite higher revenue.
Monitor the trend in operating cash flow margin, as it declined substantially from the same quarter last year.