Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow remained positive and substantial, though it decreased from both the prior quarter and the same quarter last year. Operating cash flow drove the conversion of revenue into free cash flow, with capital expenditure consuming a modest portion.
- Revenue conversion into free cash flow was supported by operating cash flow substantially exceeding revenue, while capital expenditure was a moderate deduction. The margin remained high but weakened compared to both the preceding quarter and the same quarter a year ago.
- Compared to the immediately preceding quarter, revenue improved slightly, but operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were each lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$838.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$898.0M
Cash generated by operations before capital spending.
CapEx
$60.0M
Capital spending and related asset purchases.
FCF margin
237.4%
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 |
|---|---|---|---|---|---|
| 2023-03-31 | $377.0M | $130.0M | $25.0M | $105.0M | 27.9% |
| 2023-06-30 | $332.0M | $630.0M | $32.0M | $598.0M | 180.1% |
| 2023-09-30 | $338.0M | $999.0M | $23.0M | $976.0M | 288.8% |
| 2023-12-31 | $353.0M | $898.0M | $60.0M | $838.0M | 237.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 344.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 17.0% | 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.
Weakening cash flow generation
Operating cash flow decreased from both the prior quarter and the year-ago quarter, while revenue was stable to slightly higher, indicating a lower cash conversion rate.
Free cash flow and free cash flow margin declined sequentially and year-over-year, driven by a lower operating cash flow relative to revenue.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue conversion into free cash flow was supported by operating cash flow substantially exceeding revenue, while capital expenditure was a moderate deduction. The margin remained high but weakened compared to both the preceding quarter and the same quarter a year ago.
Compared to the immediately preceding quarter, revenue improved slightly, but operating cash flow, free cash flow, and margin all declined. Versus the same quarter one year earlier, revenue was slightly higher, but operating cash flow, free cash flow, and margin were each lower.
Monitor the magnitude of capital expenditure relative to operating cash flow, as it increased compared to the prior quarter and the year-ago quarter, reducing free cash flow conversion.