Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable versus the prior quarter and higher year over year. Operating cash flow and free cash flow improved sequentially and were significantly higher than the same quarter last year, driving a stronger free cash flow margin.
- Operating cash flow as a proportion of revenue increased compared to both the prior quarter and the year-ago quarter, while capital expenditure was lower sequentially and year over year. The combination of higher operating cash flow and lower capital expenditure resulted in a higher free cash flow and an improved free cash flow margin.
- Compared to the immediately preceding quarter, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and its margin improved. Versus the same quarter one year earlier, revenue was higher, operating cash flow was substantially higher, capital expenditure was slightly lower, and free cash flow and its margin strengthened markedly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$311.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$357.4M
Cash generated by operations before capital spending.
CapEx
$45.5M
Capital spending and related asset purchases.
FCF margin
24.4%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $1.3B | $368.7M | $59.4M | $309.3M | 23.7% |
| 2023-04-01 | $1.1B | $279.2M | $46.8M | $232.4M | 20.3% |
| 2023-07-01 | $1.3B | $273.7M | $52.5M | $221.2M | 16.7% |
| 2023-09-30 | $1.3B | $357.4M | $45.5M | $311.9M | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 121.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 Strength
Operating cash flow was higher sequentially and year over year, while revenue was stable sequentially and higher year over year. This improvement in cash generation relative to revenue was the strongest observable driver of the quarter's free cash flow performance.
The higher operating cash flow directly lifted free cash flow and its margin, even as capital expenditure declined.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue increased compared to both the prior quarter and the year-ago quarter, while capital expenditure was lower sequentially and year over year. The combination of higher operating cash flow and lower capital expenditure resulted in a higher free cash flow and an improved free cash flow margin.
Compared to the immediately preceding quarter, revenue was stable, operating cash flow was higher, capital expenditure was lower, and free cash flow and its margin improved. Versus the same quarter one year earlier, revenue was higher, operating cash flow was substantially higher, capital expenditure was slightly lower, and free cash flow and its margin strengthened markedly.
Monitor whether operating cash flow can sustain its elevated level relative to revenue in future quarters.