Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue remained stable sequentially while operating cash flow improved significantly, leading to a higher free cash flow margin. Compared to the same quarter last year, revenue was higher but free cash flow margin was lower due to increased capital expenditure.
- Operating cash flow as a percentage of revenue improved from the prior quarter, and after accounting for capital expenditure, free cash flow margin also improved. The conversion of revenue into free cash flow was stronger than the previous quarter but weaker than the same quarter last year.
- Compared to the immediately preceding quarter, free cash flow and its margin both improved. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin weakened, as capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$652.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$687.0M
Cash generated by operations before capital spending.
CapEx
$35.0M
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 | $2.4B | $482.0M | $20.0M | $462.0M | 18.9% |
| 2023-03-31 | $2.3B | $330.0M | $44.0M | $286.0M | 12.5% |
| 2023-06-30 | $2.7B | $464.0M | $30.0M | $434.0M | 16.3% |
| 2023-09-30 | $2.7B | $687.0M | $35.0M | $652.0M | 24.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 172.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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 Improvement
Operating cash flow increased from the prior quarter, driving a higher free cash flow despite a modest rise in capital expenditure.
This improvement was the primary factor behind the sequential increase in free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a percentage of revenue improved from the prior quarter, and after accounting for capital expenditure, free cash flow margin also improved. The conversion of revenue into free cash flow was stronger than the previous quarter but weaker than the same quarter last year.
Compared to the immediately preceding quarter, free cash flow and its margin both improved. Versus the same quarter one year earlier, free cash flow was slightly lower and the margin weakened, as capital expenditure was higher.
Monitor the level of capital expenditure, which increased both sequentially and year over year.