Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, revenue, operating cash flow, and free cash flow all increased compared to the previous quarter, leading to an improved free cash flow margin. Compared to the same quarter one year earlier, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weakened margin.
- Revenue was higher than both the previous quarter and the year-ago quarter. Operating cash flow and free cash flow were higher sequentially but lower year-over-year. Capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter. The free cash flow margin improved sequentially but declined from the year-ago period. The filing notes that for the nine-month period, net cash from operating activities increased compared to the prior year, supported by higher net income and working capital changes.
- Sequentially, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and margin were higher. Year-over-year, the picture was mixed: revenue was higher, but operating cash flow, free cash flow, and margin were lower, while capital expenditure was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$524.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$661.2M
Cash generated by operations before capital spending.
CapEx
$136.8M
Capital spending and related asset purchases.
FCF margin
16.8%
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 | $2.9B | $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% |
| 2023-09-30 | $3.1B | $661.2M | $136.8M | $524.4M | 16.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 212.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.4% | 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 operating cash flow recovery
Operating cash flow improved from the previous quarter, driving a higher free cash flow and free cash flow margin. The filing indicates that year-to-date operating cash flow benefited from higher net income and working capital changes.
This improvement raised the free cash flow margin above the prior quarter's level, though it remained below the year-ago level.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the previous quarter and the year-ago quarter. Operating cash flow and free cash flow were higher sequentially but lower year-over-year. Capital expenditure was slightly higher than the prior quarter but lower than the year-ago quarter. The free cash flow margin improved sequentially but declined from the year-ago period. The filing notes that for the nine-month period, net cash from operating activities increased compared to the prior year, supported by higher net income and working capital changes.
Sequentially, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and margin were higher. Year-over-year, the picture was mixed: revenue was higher, but operating cash flow, free cash flow, and margin were lower, while capital expenditure was slightly lower.
Monitor the sustainability of operating cash flow, as it declined year-over-year while revenue increased.