Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased compared to both the prior quarter and the same quarter one year earlier. Free cash flow margin improved markedly from the year-ago quarter but weakened from the immediately preceding quarter, while the company noted a strong liquidity position with significant cash and investments held for cash management purposes.
- Operating cash flow and free cash flow were higher than the year-ago quarter but lower than the prior quarter, resulting in a mixed cash conversion pattern. Capital expenditure was lower than the year-ago quarter and slightly higher than the prior quarter, contributing to the free cash flow margin being higher year-over-year but lower sequentially.
- Compared to the immediately preceding quarter, free cash flow and its margin were lower, driven by a decline in operating cash flow despite a modest increase in revenue. Compared to the same quarter one year earlier, free cash flow and its margin were significantly higher, as operating cash flow rose while capital expenditure fell.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$296.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$338.7M
Cash generated by operations before capital spending.
CapEx
$42.3M
Capital spending and related asset purchases.
FCF margin
16.0%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $1.9B | $338.7M | $42.3M | $296.4M | 16.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 71.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.3% | 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.
Year-over-Year Operating Cash Flow Improvement
Operating cash flow increased substantially compared to the same quarter one year earlier, while capital expenditure was lower, resulting in a much higher free cash flow and a significantly improved free cash flow margin.
This improvement in cash generation relative to the prior year strengthened the company's ability to fund operations and investments internally.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow and free cash flow were higher than the year-ago quarter but lower than the prior quarter, resulting in a mixed cash conversion pattern. Capital expenditure was lower than the year-ago quarter and slightly higher than the prior quarter, contributing to the free cash flow margin being higher year-over-year but lower sequentially.
Compared to the immediately preceding quarter, free cash flow and its margin were lower, driven by a decline in operating cash flow despite a modest increase in revenue. Compared to the same quarter one year earlier, free cash flow and its margin were significantly higher, as operating cash flow rose while capital expenditure fell.
Monitor the sequential decline in operating cash flow, which reversed the strong year-over-year improvement and weighed on free cash flow margin.