Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow and margin improved substantially compared to the same quarter last year, but declined from the prior quarter. Operating cash flow was the primary driver of the year-over-year improvement, while higher capital expenditure contributed to the sequential decline.
- Revenue was stable sequentially and higher year-over-year. Operating cash flow as a percentage of net earnings improved significantly year-over-year, as noted in the filing, due to reduced working capital expansion. Free cash flow margin followed a similar pattern.
- Compared to the prior quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and an increase in capital expenditure. Compared to the same quarter a year ago, all metrics improved, with operating cash flow and free cash flow showing notable increases.
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
$246.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$302.1M
Cash generated by operations before capital spending.
CapEx
$55.9M
Capital spending and related asset purchases.
FCF margin
13.1%
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 | $1.8B | $257.9M | $48.0M | $209.9M | 11.6% |
| 2022-12-31 | $1.7B | $301.9M | $42.8M | $259.1M | 15.3% |
| 2023-03-31 | $1.9B | $388.5M | $33.7M | $354.8M | 19.1% |
| 2023-06-30 | $1.9B | $302.1M | $55.9M | $246.2M | 13.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 82.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$106.4M | 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 Improvement
Operating cash flow increased significantly year-over-year, supported by reduced working capital usage as supply chains normalized, as noted in the filing.
This improvement was the primary factor behind the higher free cash flow and margin compared to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable sequentially and higher year-over-year. Operating cash flow as a percentage of net earnings improved significantly year-over-year, as noted in the filing, due to reduced working capital expansion. Free cash flow margin followed a similar pattern.
Compared to the prior quarter, free cash flow and margin were lower, driven by a decrease in operating cash flow and an increase in capital expenditure. Compared to the same quarter a year ago, all metrics improved, with operating cash flow and free cash flow showing notable increases.
Monitor the trend in working capital changes, as the filing indicated that normalized supply chains reduced the rate of working capital expansion.