Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin decreased from the prior quarter but increased from the same quarter last year. The company’s business model does not require significant long-term fixed asset investment, with cash flow primarily driven by working capital.
- Operating cash flow more than covered capital expenditure, resulting in positive free cash flow. The free cash flow margin, while lower than the preceding quarter, was slightly higher than the same quarter a year earlier.
- Compared to the prior quarter, free cash flow and margin declined as operating cash flow decreased while capital expenditure was slightly lower. Compared to the same quarter a year earlier, free cash flow and margin improved, supported by higher operating cash flow despite a larger capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$544.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$147.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$173.0M
Cash generated by operations before capital spending.
CapEx
$25.3M
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $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% |
| 2023-12-31 | $1.4B | $173.0M | $25.3M | $147.7M | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 161.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | $160.9M | 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
Free cash flow movement this quarter was primarily influenced by changes in operating cash flow, as capital expenditure remained relatively stable. The sequential drop in operating cash flow drove the decline in free cash flow.
A sustained change in operating cash flow would directly affect free cash flow generation.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow more than covered capital expenditure, resulting in positive free cash flow. The free cash flow margin, while lower than the preceding quarter, was slightly higher than the same quarter a year earlier.
Compared to the prior quarter, free cash flow and margin declined as operating cash flow decreased while capital expenditure was slightly lower. Compared to the same quarter a year earlier, free cash flow and margin improved, supported by higher operating cash flow despite a larger capital expenditure.
Monitor the trajectory of operating cash flow given its sequential decline, as the company's cash generation relies on working capital efficiency.