Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined versus both the prior quarter and the year-ago quarter, yet free cash flow improved markedly from the prior quarter and was higher than the same quarter last year. The free cash flow margin strengthened significantly compared with the preceding quarter and also improved from the year-ago period.
- Operating cash flow rose to a level well above both the prior quarter and the year-ago quarter, while capital expenditure was slightly lower than the previous quarter but higher than a year ago. The resulting free cash flow and its margin improved sequentially and were higher year over year, reflecting a stronger conversion of revenue into cash.
- Compared with the immediately preceding quarter, operating cash flow and free cash flow were markedly higher, while revenue was lower. Versus the same quarter one year earlier, operating cash flow and free cash flow were higher, and revenue was lower, with capital expenditure moderately higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$594.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$206.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$226.6M
Cash generated by operations before capital spending.
CapEx
$20.1M
Capital spending and related asset purchases.
FCF margin
26.0%
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 | $810.7M | $167.3M | $20.0M | $147.3M | 18.2% |
| 2023-03-31 | $845.4M | $147.9M | $26.6M | $121.3M | 14.3% |
| 2023-06-30 | $846.2M | $141.2M | $21.6M | $119.6M | 14.1% |
| 2023-09-30 | $793.4M | $226.6M | $20.1M | $206.5M | 26.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 98.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$766.7M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong cash generation
The largest observable change was a sharp increase in operating cash flow compared with the prior quarter, which drove a substantial improvement in free cash flow and its margin, even as revenue declined.
This cash flow strength more than offset the revenue decline, resulting in meaningfully higher 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 rose to a level well above both the prior quarter and the year-ago quarter, while capital expenditure was slightly lower than the previous quarter but higher than a year ago. The resulting free cash flow and its margin improved sequentially and were higher year over year, reflecting a stronger conversion of revenue into cash.
Compared with the immediately preceding quarter, operating cash flow and free cash flow were markedly higher, while revenue was lower. Versus the same quarter one year earlier, operating cash flow and free cash flow were higher, and revenue was lower, with capital expenditure moderately higher.
Monitor whether the elevated operating cash flow can be sustained given that revenue decreased sequentially and year over year.