Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company's cash conversion weakened materially, with a low free cash flow margin driven by a sharp decline in operating cash flow. Revenue was stable compared to the prior quarter but operating cash flow fell significantly, and both metrics dropped versus the same quarter last year.
- Operating cash flow was much lower than revenue, resulting in a thin free cash flow margin. Capital expenditure was stable sequentially, but the drop in operating cash flow drove free cash flow lower.
- Compared to the immediately preceding quarter, revenue was slightly higher but operating cash flow and free cash flow were much lower, and free cash flow margin weakened. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were all lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$376.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$16.3M
Cash generated by operations before capital spending.
CapEx
$9.9M
Capital spending and related asset purchases.
FCF margin
1.3%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $482.7M | $203.2M | $6.3M | $197.0M | 40.8% |
| 2022-09-30 | $529.2M | $136.8M | $7.7M | $129.1M | 24.4% |
| 2022-12-31 | $505.3M | $53.9M | $9.6M | $44.2M | 8.8% |
| 2023-03-31 | $508.6M | $16.3M | $9.9M | $6.5M | 1.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 7.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | 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 decline
The current quarter's operating cash flow was substantially lower than both the prior quarter and the same quarter last year, while revenue remained relatively stable. This divergence was the strongest observable driver of the weakened free cash flow.
The reduction in operating cash flow directly compressed free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was much lower than revenue, resulting in a thin free cash flow margin. Capital expenditure was stable sequentially, but the drop in operating cash flow drove free cash flow lower.
Compared to the immediately preceding quarter, revenue was slightly higher but operating cash flow and free cash flow were much lower, and free cash flow margin weakened. Versus the same quarter one year earlier, revenue was higher while operating cash flow, free cash flow, and margin were all lower.
The trajectory of operating cash flow, given its significant decline from both the prior quarter and the year-ago quarter.