Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable, but free cash flow margin weakened sequentially and compared to the same quarter last year. Operating cash flow declined significantly from the prior quarter, driving the reduction in free cash flow.
- Free cash flow margin contracted due to lower operating cash flow relative to revenue, despite a slight reduction in capital expenditure.
- Compared to the immediately preceding quarter, operating cash flow and free cash flow were weaker, while revenue was stable. Versus the same quarter one year earlier, operating cash flow was lower and free cash flow margin also weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$149.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$174.4M
Cash generated by operations before capital spending.
CapEx
$24.8M
Capital spending and related asset purchases.
FCF margin
10.2%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $1.5B | $294.4M | $18.3M | $276.1M | 18.9% |
| 2022-09-30 | $1.5B | $329.8M | $22.6M | $307.2M | 21.1% |
| 2022-12-31 | $1.5B | $464.2M | $36.1M | $428.1M | 28.0% |
| 2023-03-31 | $1.5B | $174.4M | $24.8M | $149.6M | 10.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 86.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.4B | 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 Decline
The most notable observable driver was the sharp decline in operating cash flow from the prior quarter, which outweighed the modest reduction in capital spending. This directly caused the decrease in free cash flow and margin compression.
The weakened cash conversion indicates lower efficiency in turning revenue into free cash flow during the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Free cash flow margin contracted due to lower operating cash flow relative to revenue, despite a slight reduction in capital expenditure.
Compared to the immediately preceding quarter, operating cash flow and free cash flow were weaker, while revenue was stable. Versus the same quarter one year earlier, operating cash flow was lower and free cash flow margin also weakened.
Monitor whether operating cash flow recovers to prior levels in the coming quarters.