Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly compared to both the prior quarter and the same quarter last year, driven by higher operating cash flow. The free cash flow margin also increased, reflecting stronger cash generation relative to revenue.
- Operating cash flow as a percentage of revenue increased, leading to a higher free cash flow margin. Capital expenditure remained relatively stable, so the improvement in free cash flow was primarily due to stronger operating cash flow.
- Compared to the prior quarter, revenue was slightly higher while operating cash flow and free cash flow were substantially higher. Year-over-year, all metrics improved, with free cash flow and margin showing the largest gains.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$96.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$37.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$45.2M
Cash generated by operations before capital spending.
CapEx
$7.8M
Capital spending and related asset purchases.
FCF margin
22.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $155.3M | $27.3M | $6.1M | $21.2M | 13.7% |
| 2022-12-31 | $146.6M | $21.8M | $5.7M | $16.2M | 11.0% |
| 2023-03-31 | $165.9M | $29.2M | $7.4M | $21.8M | 13.1% |
| 2023-06-30 | $168.9M | $45.2M | $7.8M | $37.4M | 22.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 2678.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.6% | 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 Improvement
Operating cash flow increased from the prior quarter and from the same quarter last year, significantly boosting free cash flow. The company noted that its cash and cash equivalents rose primarily due to cash provided by operating activities.
The rise in operating cash flow was the strongest factor behind the higher 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 as a percentage of revenue increased, leading to a higher free cash flow margin. Capital expenditure remained relatively stable, so the improvement in free cash flow was primarily due to stronger operating cash flow.
Compared to the prior quarter, revenue was slightly higher while operating cash flow and free cash flow were substantially higher. Year-over-year, all metrics improved, with free cash flow and margin showing the largest gains.
Monitor whether operating cash flow can sustain its current level relative to revenue in future quarters.