Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were lower compared to both the prior quarter and the same quarter last year, resulting in a lower free cash flow and a weakened free cash flow margin. The decline in cash conversion was driven by a proportionally larger drop in operating cash flow relative to revenue.
- Cash conversion weakened as operating cash flow fell more sharply than revenue, producing a lower free cash flow margin. Capital expenditure was stable relative to the prior quarter but lower than a year ago, which did not offset the decline in operating cash flow.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, all metrics were also lower, with revenue showing the largest relative decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$148.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$158.4M
Cash generated by operations before capital spending.
CapEx
$10.5M
Capital spending and related asset purchases.
FCF margin
6.6%
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 | $4.4B | $670.4M | $15.9M | $654.5M | 15.0% |
| 2022-12-31 | $3.4B | $486.7M | $18.3M | $468.4M | 13.6% |
| 2023-03-31 | $2.6B | $546.4M | $10.1M | $536.3M | 20.7% |
| 2023-06-30 | $2.2B | $158.4M | $10.5M | $148.0M | 6.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 75.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | 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 decreased more than revenue on a relative basis compared to both the prior quarter and the year-ago quarter, compressing the free cash flow margin. The filing context notes forward-looking statements about a slowing economy and drop in demand, but does not provide specific causal links to the current quarter's metrics.
The lower operating cash flow was the strongest observable driver of the reduced free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow fell more sharply than revenue, producing a lower free cash flow margin. Capital expenditure was stable relative to the prior quarter but lower than a year ago, which did not offset the decline in operating cash flow.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, all metrics were also lower, with revenue showing the largest relative decline.
Monitor whether operating cash flow can stabilize relative to revenue, as its proportionally larger decline was the primary factor behind the weakened free cash flow margin.