Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated a strong free cash flow margin in the first quarter, turning negative free cash flow from the same quarter last year into a positive margin. Operating cash flow improved significantly compared to both the previous quarter and the year-ago quarter, while capital expenditure was higher than the year-ago quarter but lower than the prior quarter.
- Revenue increased compared to both the prior quarter and the same quarter last year, while operating cash flow expanded even more sharply, driving a much higher free cash flow. The free cash flow margin rose substantially, reflecting improved cash conversion from revenue.
- Compared to the immediate prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter one year earlier, revenue increased, operating cash flow turned from negative to positive, free cash flow became positive, and the margin shifted from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$384.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$424.5M
Cash generated by operations before capital spending.
CapEx
$40.1M
Capital spending and related asset purchases.
FCF margin
22.6%
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 | $1.7B | $131.0M | $77.9M | $53.1M | 3.2% |
| 2022-09-30 | $1.6B | $458.5M | $36.7M | $421.8M | 26.0% |
| 2022-12-31 | $1.5B | $298.5M | $52.6M | $245.9M | 16.3% |
| 2023-03-31 | $1.7B | $424.5M | $40.1M | $384.4M | 22.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 96.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | 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 Surge
The most significant observable driver was operating cash flow, which rose sharply compared to both the prior quarter and the same quarter last year, shifting from a negative to a large positive figure year-over-year. This directly lifted free cash flow and the margin.
The surge in operating cash flow was the primary reason for the improvement in free cash flow and the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to both the prior quarter and the same quarter last year, while operating cash flow expanded even more sharply, driving a much higher free cash flow. The free cash flow margin rose substantially, reflecting improved cash conversion from revenue.
Compared to the immediate prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin all improved. Versus the same quarter one year earlier, revenue increased, operating cash flow turned from negative to positive, free cash flow became positive, and the margin shifted from negative to positive.
Monitor capital expenditure levels, which were lower than the prior quarter but higher than the year-ago quarter, as a potential factor affecting future free cash flow.