Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow weakened sharply in the current quarter as operating cash flow declined while capital expenditure rose slightly. Revenue increased compared to both the prior quarter and the same quarter last year, but the cash conversion rate dropped significantly.
- Revenue was higher than both the preceding quarter and the year-ago quarter, yet operating cash flow was lower, resulting in a free cash flow margin that was lower than both comparison periods. The gap between revenue growth and cash generation widened.
- Compared to the immediately preceding quarter, free cash flow and operating cash flow were lower, while revenue was higher. Versus the same quarter one year earlier, free cash flow and operating cash flow were also lower, despite higher revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$272.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$25.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$52.8M
Cash generated by operations before capital spending.
CapEx
$27.1M
Capital spending and related asset purchases.
FCF margin
3.0%
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 | $700.6M | $128.0M | $16.3M | $111.7M | 15.9% |
| 2023-03-31 | $752.5M | $48.0M | $19.1M | $28.9M | 3.8% |
| 2023-06-30 | $839.9M | $132.0M | $25.9M | $106.1M | 12.6% |
| 2023-09-30 | $858.9M | $52.8M | $27.1M | $25.7M | 3.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 19.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.2% | 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
Operating cash flow was lower than both the prior quarter and the year-ago quarter, despite higher revenue. This was the strongest observable driver of the reduced free cash flow.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the preceding quarter and the year-ago quarter, yet operating cash flow was lower, resulting in a free cash flow margin that was lower than both comparison periods. The gap between revenue growth and cash generation widened.
Compared to the immediately preceding quarter, free cash flow and operating cash flow were lower, while revenue was higher. Versus the same quarter one year earlier, free cash flow and operating cash flow were also lower, despite higher revenue.
Monitor whether operating cash flow recovers toward historical levels, as it was the primary factor behind the weakened free cash flow.