Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the second quarter, the company generated positive free cash flow, supported by higher revenue and stronger operating cash flow compared to the previous quarter. While revenue was lower than the same quarter a year ago, free cash flow margin improved significantly.
- The company converted a greater share of revenue into operating cash flow, leading to a sizable free cash flow figure. Capital expenditure increased but was more than offset by the rise in operating cash flow.
- Compared to the prior quarter, operating cash flow turned positive from negative, and free cash flow margin improved from negative to positive. Relative to the year-ago quarter, both operating cash flow and free cash flow were higher despite lower revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$15.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$53.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$83.1M
Cash generated by operations before capital spending.
CapEx
$29.9M
Capital spending and related asset purchases.
FCF margin
5.3%
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 | $1.1B | -$56.0M | $18.3M | -$74.4M | -6.8% |
| 2022-12-31 | $1.0B | $100.9M | $21.4M | $79.5M | 7.6% |
| 2023-03-31 | $887.9M | -$18.6M | $24.0M | -$42.5M | -4.8% |
| 2023-06-30 | $1.0B | $83.1M | $29.9M | $53.2M | 5.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 117.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.3B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Improved Cash Generation
Operating cash flow recovered strongly from the prior quarter's deficit and surpassed the year-ago level, driving free cash flow into positive territory.
This improved cash position strengthens the company's financial flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a greater share of revenue into operating cash flow, leading to a sizable free cash flow figure. Capital expenditure increased but was more than offset by the rise in operating cash flow.
Compared to the prior quarter, operating cash flow turned positive from negative, and free cash flow margin improved from negative to positive. Relative to the year-ago quarter, both operating cash flow and free cash flow were higher despite lower revenue.
Monitor the sustainability of operating cash flow levels as revenue remains below the prior year.