Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined sequentially but improved compared to the same quarter last year, as operating cash flow weakened from the prior quarter while capital expenditure decreased. The free cash flow margin narrowed sequentially yet widened year over year.
- Revenue was slightly lower than both the preceding quarter and the year-ago quarter. Operating cash flow, after deducting lower capital expenditure, produced free cash flow that was lower than the prior quarter but higher than the same quarter a year earlier.
- Compared with the immediately preceding quarter, both revenue and operating cash flow were lower, leading to a lower free cash flow and a weaker margin. Versus the same quarter one year earlier, operating cash flow was higher and capital expenditure was lower, resulting in improved free cash flow and an expanded margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$611.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$156.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$165.3M
Cash generated by operations before capital spending.
CapEx
$9.0M
Capital spending and related asset purchases.
FCF margin
22.6%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $703.2M | $140.9M | $10.7M | $130.2M | 18.5% |
| 2023-06-30 | $702.6M | $165.1M | $15.0M | $150.0M | 21.4% |
| 2023-09-30 | $707.0M | $189.8M | $15.4M | $174.4M | 24.7% |
| 2023-12-31 | $692.6M | $165.3M | $9.0M | $156.3M | 22.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 112.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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 strength year over year
The filing notes that operating cash flow increased from the comparable prior-year period primarily due to an increase in cash received from customers, partially offset by strong billings and an increase in deferred revenue.
This improvement supported free cash flow growth despite a lower revenue base 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 slightly lower than both the preceding quarter and the year-ago quarter. Operating cash flow, after deducting lower capital expenditure, produced free cash flow that was lower than the prior quarter but higher than the same quarter a year earlier.
Compared with the immediately preceding quarter, both revenue and operating cash flow were lower, leading to a lower free cash flow and a weaker margin. Versus the same quarter one year earlier, operating cash flow was higher and capital expenditure was lower, resulting in improved free cash flow and an expanded margin.
Monitor the level of share repurchases, which consumed a notable portion of operating cash flow in the quarter.