Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow strengthened markedly this quarter versus both the immediately preceding period and the year-ago period. The improvement came from higher operating cash flow, while revenue held steady.
- Cash conversion improved as operating cash flow increased sharply, yielding a larger free cash flow relative to revenue. Capital expenditure was lower than the prior quarter but slightly higher than a year ago.
- Compared to the prior quarter, free cash flow improved significantly due to a sharp rise in operating cash flow. On a year-over-year basis, free cash flow also improved, with operating cash flow higher despite a modest increase in capital spending.
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
$300.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$321.0M
Cash generated by operations before capital spending.
CapEx
$21.0M
Capital spending and related asset purchases.
FCF margin
19.7%
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 | $1.5B | $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% |
| 2023-06-30 | $1.5B | $321.0M | $21.0M | $300.0M | 19.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 143.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.3B | 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 Growth
Operating cash flow rose substantially from the prior quarter and also increased compared to the same period last year, driving free cash flow higher. Revenue was unchanged, so the entire improvement came from cash conversion efficiency.
The improvement in operating cash flow directly boosted free cash flow and margin, indicating stronger cash generation from operations.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion improved as operating cash flow increased sharply, yielding a larger free cash flow relative to revenue. Capital expenditure was lower than the prior quarter but slightly higher than a year ago.
Compared to the prior quarter, free cash flow improved significantly due to a sharp rise in operating cash flow. On a year-over-year basis, free cash flow also improved, with operating cash flow higher despite a modest increase in capital spending.
Monitor whether operating cash flow can sustain its elevated level in subsequent quarters.