Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow margin weakened significantly versus both the prior quarter and the same quarter last year. Revenue was stable sequentially but lower year-over-year, while operating cash flow contracted sharply.
- Cash conversion from revenue to free cash flow was lower than the previous periods. Operating cash flow as a proportion of revenue declined, while capital expenditure remained relatively stable, resulting in a much lower free cash flow and margin.
- Compared to the immediately preceding quarter, free cash flow margin weakened from a higher level to a lower level, driven by a substantially lower operating cash flow on similar revenue. Versus the same quarter one year ago, both revenue and operating cash flow were lower, leading to a lower free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$596.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$102.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$207.0M
Cash generated by operations before capital spending.
CapEx
$105.0M
Capital spending and related asset purchases.
FCF margin
4.4%
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 | $2.3B | $334.0M | $147.0M | $187.0M | 8.0% |
| 2023-03-31 | $2.3B | $94.0M | $127.0M | -$33.0M | -1.4% |
| 2023-06-30 | $2.3B | $444.0M | $104.0M | $340.0M | 14.5% |
| 2023-09-30 | $2.3B | $207.0M | $105.0M | $102.0M | 4.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 45.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | 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.
Decline in Operating Cash Flow
Operating cash flow decreased significantly from the prior quarter and the year-ago quarter, while capital expenditure remained steady. The filing notes that net cash provided by operating activities for the nine-month period also decreased compared to the prior year, consistent with the quarter's trend.
Free cash flow and margin were materially lower than both comparison periods, driven entirely by the contraction in operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion from revenue to free cash flow was lower than the previous periods. Operating cash flow as a proportion of revenue declined, while capital expenditure remained relatively stable, resulting in a much lower free cash flow and margin.
Compared to the immediately preceding quarter, free cash flow margin weakened from a higher level to a lower level, driven by a substantially lower operating cash flow on similar revenue. Versus the same quarter one year ago, both revenue and operating cash flow were lower, leading to a lower free cash flow margin.
Monitor the level of operating cash flow relative to revenue, as it declined substantially from both prior periods.