Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the first quarter, revenue and operating cash flow both increased from the prior quarter, while capital expenditure decreased, leading to higher free cash flow and an improved free cash flow margin. However, compared to the same quarter a year ago, free cash flow and margin were lower despite higher revenue, and the filing noted that the company has observed slower usage growth from some existing customers amid macroeconomic uncertainty.
- The company converted a larger share of revenue into free cash flow than in the immediately preceding quarter, as operating cash flow rose and capital spending declined. The free cash flow margin improved sequentially.
- Compared to the prior quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower, representing a mixed performance.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$370.3M
Trailing twelve-month free cash flow.
Quarter free cash flow
$125.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$133.8M
Cash generated by operations before capital spending.
CapEx
$8.7M
Capital spending and related asset purchases.
FCF margin
26.0%
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 | $406.1M | $73.0M | $6.0M | $67.0M | 16.5% |
| 2022-09-30 | $436.5M | $83.6M | $9.7M | $73.9M | 16.9% |
| 2022-12-31 | $469.4M | $114.4M | $10.1M | $104.4M | 22.2% |
| 2023-03-31 | $481.7M | $133.8M | $8.7M | $125.0M | 26.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -519.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | 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.
Free Cash Flow Margin Trend
The free cash flow margin improved sequentially but remained substantially lower than the same quarter last year, reflecting a weakened cash conversion efficiency relative to the prior year.
The year-over-year decline in free cash flow margin could signal a shift in the company's ability to convert revenue into free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a larger share of revenue into free cash flow than in the immediately preceding quarter, as operating cash flow rose and capital spending declined. The free cash flow margin improved sequentially.
Compared to the prior quarter, all key metrics improved: revenue, operating cash flow, free cash flow, and margin were higher. Versus the same quarter one year earlier, revenue was higher but operating cash flow, free cash flow, and margin were lower, representing a mixed performance.
Monitor the trend in free cash flow margin, as it declined year-over-year despite revenue growth.