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 and higher than the same quarter last year. Free cash flow improved significantly year over year, driven by a much higher operating cash flow, while capital expenditure was slightly lower.
- Operating cash flow as a proportion of revenue was higher than the prior quarter and substantially higher than the same quarter last year. After deducting capital expenditure, free cash flow margin improved markedly year over year, though it was slightly lower than the prior quarter.
- Compared to the prior quarter, revenue was slightly higher, operating cash flow was lower, capital expenditure was lower, and free cash flow was higher. Compared to the same quarter last year, revenue was higher, operating cash flow was substantially higher, capital expenditure was lower, and free cash flow was substantially higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$325.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$450.1M
Cash generated by operations before capital spending.
CapEx
$124.5M
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $2.9B | $710.5M | $143.9M | $566.6M | 19.2% |
| 2022-12-31 | $2.9B | $343.7M | $194.0M | $149.7M | 5.1% |
| 2023-03-31 | $2.9B | $462.6M | $147.7M | $314.9M | 11.0% |
| 2023-06-30 | $3.0B | $450.1M | $124.5M | $325.6M | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 182.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.1% | 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 Improvement
Operating cash flow was substantially higher than the same quarter last year, while capital expenditure was slightly lower, resulting in a much higher free cash flow. The filing context notes that net cash provided by operating activities for the six-month period increased, driven by changes in working capital and non-cash items.
This driver was the primary factor behind the year-over-year improvement in free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was higher than the prior quarter and substantially higher than the same quarter last year. After deducting capital expenditure, free cash flow margin improved markedly year over year, though it was slightly lower than the prior quarter.
Compared to the prior quarter, revenue was slightly higher, operating cash flow was lower, capital expenditure was lower, and free cash flow was higher. Compared to the same quarter last year, revenue was higher, operating cash flow was substantially higher, capital expenditure was lower, and free cash flow was substantially higher.
Monitor the trend in operating cash flow, which declined from the prior quarter despite higher revenue.