Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the final quarter of the fiscal year, free cash flow was lower than the preceding quarter and the same quarter a year earlier, as both revenue and operating cash flow declined sequentially and capital expenditure increased year-over-year. The free cash flow margin weakened compared to both periods.
- Revenue was lower than the previous quarter but higher than a year ago. Operating cash flow decreased from the prior quarter and was slightly above the year-ago level. Capital expenditure rose both sequentially and from the same quarter one year earlier, resulting in free cash flow that was lower than both comparison periods. The free cash flow margin also contracted.
- Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Versus the same quarter one year earlier, revenue was higher and operating cash flow was slightly higher, but capital expenditure increased more, leading to lower free cash flow and a lower margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$92.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$14.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$22.5M
Cash generated by operations before capital spending.
CapEx
$8.4M
Capital spending and related asset purchases.
FCF margin
8.9%
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 | $165.9M | $29.2M | $7.4M | $21.8M | 13.1% |
| 2023-06-30 | $168.9M | $45.2M | $7.8M | $37.4M | 22.1% |
| 2023-09-30 | $167.3M | $27.4M | $8.0M | $19.4M | 11.6% |
| 2023-12-31 | $158.7M | $22.5M | $8.4M | $14.1M | 8.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 191.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.3% | 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.
Free Cash Flow Margin Compression
The free cash flow margin declined from the prior quarter and from the same quarter a year earlier, as the combination of lower sequential revenue and higher capital expenditure outpaced the change in operating cash flow.
The reduced margin indicates lower cash conversion efficiency per dollar of revenue in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the previous quarter but higher than a year ago. Operating cash flow decreased from the prior quarter and was slightly above the year-ago level. Capital expenditure rose both sequentially and from the same quarter one year earlier, resulting in free cash flow that was lower than both comparison periods. The free cash flow margin also contracted.
Compared to the immediately preceding quarter, revenue, operating cash flow, free cash flow, and margin all decreased. Versus the same quarter one year earlier, revenue was higher and operating cash flow was slightly higher, but capital expenditure increased more, leading to lower free cash flow and a lower margin.
Monitor the trajectory of capital expenditure, which increased from both the prior quarter and the year-ago quarter, as it directly affected free cash flow generation.