Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was stable compared to a year ago but decreased sharply from the prior quarter, as the free cash flow margin weakened. Revenue improved, yet operating cash flow contracted, resulting in a lower cash conversion rate.
- Revenue rose slightly, but operating cash flow declined significantly, driving a lower free cash flow margin. Minimal capital expenditure had little impact on the conversion.
- Compared to the prior quarter, free cash flow and margin both weakened. Versus the same quarter last year, free cash flow edged higher but the margin was lower, reflecting a larger revenue base.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$760.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$222.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$226.0M
Cash generated by operations before capital spending.
CapEx
$4.0M
Capital spending and related asset purchases.
FCF margin
23.5%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $748.0M | -$88.0M | $2.0M | -$90.0M | -12.0% |
| 2022-12-30 | $936.0M | $306.0M | $1.0M | $305.0M | 32.6% |
| 2023-03-31 | $926.0M | $324.0M | $1.0M | $323.0M | 34.9% |
| 2023-06-30 | $943.0M | $226.0M | $4.0M | $222.0M | 23.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 118.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.9B | 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 prominent observable driver was the drop in operating cash flow, which fell even as revenue increased. This resulted in a lower free cash flow margin compared to both the prior quarter and the year-ago period.
If operating cash flow does not improve, free cash flow generation may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose slightly, but operating cash flow declined significantly, driving a lower free cash flow margin. Minimal capital expenditure had little impact on the conversion.
Compared to the prior quarter, free cash flow and margin both weakened. Versus the same quarter last year, free cash flow edged higher but the margin was lower, reflecting a larger revenue base.
Monitor whether operating cash flow can recover from its sequential decline.