Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The current quarter free cash flow margin was roughly in line with the same quarter last year but lower than the prior quarter. Revenue increased both sequentially and year-over-year, while operating cash flow declined sequentially yet rose compared to the year-ago period.
- Revenue rose, but operating cash flow as a share of revenue weakened from the prior quarter, resulting in a lower free cash flow margin. Capital expenditure increased relative to both the prior quarter and the year-ago quarter, further affecting free cash flow conversion.
- Compared with the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was slightly higher. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and capital expenditure were all higher, with the free cash flow margin remaining stable.
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
$257.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$264.1M
Cash generated by operations before capital spending.
CapEx
$6.2M
Capital spending and related asset purchases.
FCF margin
43.6%
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 | $551.8M | $212.7M | $3.5M | $209.2M | 37.9% |
| 2022-09-30 | $560.6M | $323.1M | $3.3M | $319.8M | 57.0% |
| 2022-12-31 | $576.2M | $315.4M | $5.6M | $309.8M | 53.8% |
| 2023-03-31 | $592.2M | $264.1M | $6.2M | $257.9M | 43.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 108.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.4B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Revenue Growth
Revenue increased sequentially from the prior quarter and year-over-year from the same quarter one year earlier, providing a larger base for cash generation.
The higher revenue contributed to a year-over-year increase in free cash flow, but the sequential decline in operating cash flow margin highlights the need to observe how effectively revenue converts into cash.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose, but operating cash flow as a share of revenue weakened from the prior quarter, resulting in a lower free cash flow margin. Capital expenditure increased relative to both the prior quarter and the year-ago quarter, further affecting free cash flow conversion.
Compared with the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was slightly higher. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and capital expenditure were all higher, with the free cash flow margin remaining stable.
Monitor the trend in operating cash flow relative to revenue, as its sequential decline despite higher revenue may signal a shift in conversion efficiency.