Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin improved sharply this quarter, driven by strong operating cash flow. Both sequentially and versus the prior year, cash generation strengthened markedly.
- Revenue growth supported a substantial rise in operating cash flow, while capital expenditure remained relatively modest. The company's business profile requires limited fixed-asset investment, with capital mostly deployed in working capital, enabling high cash conversion.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Versus the same quarter one year earlier, every metric was significantly stronger.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$515.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$185.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$214.2M
Cash generated by operations before capital spending.
CapEx
$28.4M
Capital spending and related asset purchases.
FCF margin
13.5%
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 | $1.1B | $132.0M | $13.6M | $118.4M | 10.6% |
| 2023-03-31 | $1.2B | $126.9M | $16.5M | $110.4M | 9.4% |
| 2023-06-30 | $1.3B | $125.4M | $24.6M | $100.8M | 7.8% |
| 2023-09-30 | $1.4B | $214.2M | $28.4M | $185.8M | 13.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 176.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | $90.4M | 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 surge
Operating cash flow this quarter was substantially higher than both the previous quarter and the same quarter last year, making it the primary contributor to free cash flow improvement.
The strong operating cash flow underpinned the expansion in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue growth supported a substantial rise in operating cash flow, while capital expenditure remained relatively modest. The company's business profile requires limited fixed-asset investment, with capital mostly deployed in working capital, enabling high cash conversion.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Versus the same quarter one year earlier, every metric was significantly stronger.
Monitor the trend in capital expenditure; if it grows faster than operating cash flow, it could compress free cash flow.