Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened significantly from the prior quarter despite revenue growth, while free cash flow was slightly higher than the same quarter last year. The decline in operating cash flow drove the lower free cash flow margin relative to both comparison periods.
- Revenue increased compared to both the prior quarter and the same quarter a year earlier, but operating cash flow was lower than the previous quarter and only slightly higher than the year-ago level. As a result, free cash flow and free cash flow margin declined from the preceding quarter and were marginally lower than the year-ago margin.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher. Compared to the same quarter one year earlier, revenue and free cash flow were higher, but free cash flow margin was slightly lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$511.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
$81.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$133.6M
Cash generated by operations before capital spending.
CapEx
$52.5M
Capital spending and related asset purchases.
FCF margin
7.8%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $741.5M | $155.4M | $74.7M | $80.7M | 10.9% |
| 2023-06-30 | $871.3M | $190.3M | $59.0M | $131.3M | 15.1% |
| 2023-09-30 | $975.0M | $269.2M | $50.4M | $218.8M | 22.4% |
| 2023-12-31 | $1.0B | $133.6M | $52.5M | $81.1M | 7.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 31.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.1% | 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.
Decline in Operating Cash Flow
Operating cash flow decreased substantially from the prior quarter, while revenue increased, resulting in a weakened cash conversion. The current quarter's operating cash flow was only slightly above the year-ago level despite higher revenue.
This lowered the free cash flow margin compared to both the preceding quarter and the same quarter last year, despite revenue growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to both the prior quarter and the same quarter a year earlier, but operating cash flow was lower than the previous quarter and only slightly higher than the year-ago level. As a result, free cash flow and free cash flow margin declined from the preceding quarter and were marginally lower than the year-ago margin.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were lower, while capital expenditure was higher. Compared to the same quarter one year earlier, revenue and free cash flow were higher, but free cash flow margin was slightly lower.
Monitor the trend in operating cash flow relative to revenue, as the decline in cash conversion from the prior quarter may indicate a shift in working capital or other operational cash flows.