Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased sequentially and year over year, while capital expenditure decreased sharply from the prior year, resulting in a substantial improvement in free cash flow compared to the year-ago quarter. Free cash flow margin remained very high, though it edged lower from the preceding quarter.
- Operating cash flow far exceeded revenue, indicating a highly favorable conversion of revenue into cash, driven by large non-cash adjustments or other inflows. Capital expenditure was modest, so free cash flow approximated operating cash flow, yielding an extremely high free cash flow margin.
- Compared to the prior quarter, revenue and operating cash flow were higher, while capital expenditure was lower, lifting free cash flow even though the free cash flow margin narrowed slightly. Versus the same quarter a year ago, revenue and operating cash flow were higher, capital expenditure was dramatically lower, and free cash flow swung from a negative figure to a large positive figure, resulting in a much improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$389.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$408.4M
Cash generated by operations before capital spending.
CapEx
$18.6M
Capital spending and related asset purchases.
FCF margin
1391.4%
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 | $21.2M | $290.1M | $147.3M | $142.8M | 674.1% |
| 2023-03-31 | $21.4M | $281.6M | $13.1M | $268.5M | 1255.8% |
| 2023-06-30 | $22.2M | $347.9M | $32.9M | $315.0M | 1418.5% |
| 2023-09-30 | $28.0M | $408.4M | $18.6M | $389.9M | 1391.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 207.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 66.3% | 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 Growth
Operating cash flow increased both sequentially and year over year, providing the primary lift to free cash flow. Capital expenditure declined, further supporting the improvement.
Higher operating cash flow combined with lower capital expenditure drove free cash flow significantly higher compared to both prior periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow far exceeded revenue, indicating a highly favorable conversion of revenue into cash, driven by large non-cash adjustments or other inflows. Capital expenditure was modest, so free cash flow approximated operating cash flow, yielding an extremely high free cash flow margin.
Compared to the prior quarter, revenue and operating cash flow were higher, while capital expenditure was lower, lifting free cash flow even though the free cash flow margin narrowed slightly. Versus the same quarter a year ago, revenue and operating cash flow were higher, capital expenditure was dramatically lower, and free cash flow swung from a negative figure to a large positive figure, resulting in a much improved free cash flow margin.
Monitor the company's compliance with debt covenants and the proportion of fixed-rate debt, as disclosed in the filing.