Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter, yet operating cash flow decreased, leading to lower free cash flow and a weakened free cash flow margin. Versus the same quarter one year ago, free cash flow improved as operating cash flow increased while capital expenditure was lower.
- Operating cash flow as a percentage of revenue was lower than the prior quarter but higher than the year-ago quarter, indicating a mixed cash conversion trend. Free cash flow margin, derived from operating cash flow less capital expenditure, followed the same pattern.
- Compared to the immediately preceding quarter, revenue was essentially stable while free cash flow was lower, resulting in a weakened free cash flow margin. Relative to the same quarter one year earlier, free cash flow was higher and the margin improved, supported by higher operating cash flow and slightly lower capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$840.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$155.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$195.3M
Cash generated by operations before capital spending.
CapEx
$40.1M
Capital spending and related asset purchases.
FCF margin
7.4%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $2.2B | $264.6M | $65.5M | $199.2M | 9.2% |
| 2022-12-31 | $1.5B | $338.6M | $45.0M | $293.6M | 19.9% |
| 2023-03-31 | $2.1B | $241.3M | $48.4M | $192.9M | 9.3% |
| 2023-06-30 | $2.1B | $195.3M | $40.1M | $155.2M | 7.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 64.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | 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.
Operating Cash Flow Decline
The strongest observable driver for the quarter was the decrease in operating cash flow compared to the prior quarter, which more than offset stable revenue and a minor reduction in capital expenditure, resulting in lower free cash flow.
This decline in operating cash flow directly weakened free cash flow and margin relative to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue was lower than the prior quarter but higher than the year-ago quarter, indicating a mixed cash conversion trend. Free cash flow margin, derived from operating cash flow less capital expenditure, followed the same pattern.
Compared to the immediately preceding quarter, revenue was essentially stable while free cash flow was lower, resulting in a weakened free cash flow margin. Relative to the same quarter one year earlier, free cash flow was higher and the margin improved, supported by higher operating cash flow and slightly lower capital expenditure.
Monitor the trajectory of free cash flow margin relative to the prior quarter, as it weakened despite stable revenue.