Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased from both the prior quarter and the same quarter last year, but free cash flow margin improved sequentially while declining year-over-year. Operating cash flow was stable versus the prior quarter but lower than the year-ago period, and capital expenditure decreased sequentially.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow was similar to the prior quarter but lower than the year-ago quarter, while capital expenditure was lower than the prior quarter and slightly higher than the year-ago quarter. Free cash flow was higher than the prior quarter but lower than the year-ago quarter, resulting in a free cash flow margin that improved sequentially but weakened compared to the same quarter one year earlier.
- Compared to the immediately preceding quarter, revenue and free cash flow were higher, while capital expenditure was lower, leading to an improved free cash flow margin. Compared to the same quarter one year earlier, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
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
$287.6M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$291.1M
Cash generated by operations before capital spending.
CapEx
$3.6M
Capital spending and related asset purchases.
FCF margin
46.0%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $576.2M | $315.4M | $5.6M | $309.8M | 53.8% |
| 2023-03-31 | $592.2M | $264.1M | $6.2M | $257.9M | 43.6% |
| 2023-06-30 | $621.2M | $291.8M | $9.2M | $282.7M | 45.5% |
| 2023-09-30 | $625.4M | $291.1M | $3.6M | $287.6M | 46.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 110.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.6B | 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 Conversion
Revenue increased year-over-year, but operating cash flow declined, causing the free cash flow margin to weaken. This divergence is the most notable observable change in cash conversion efficiency.
If operating cash flow does not keep pace with revenue growth, free cash flow margin may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow was similar to the prior quarter but lower than the year-ago quarter, while capital expenditure was lower than the prior quarter and slightly higher than the year-ago quarter. Free cash flow was higher than the prior quarter but lower than the year-ago quarter, resulting in a free cash flow margin that improved sequentially but weakened compared to the same quarter one year earlier.
Compared to the immediately preceding quarter, revenue and free cash flow were higher, while capital expenditure was lower, leading to an improved free cash flow margin. Compared to the same quarter one year earlier, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
Monitor the trend in operating cash flow relative to revenue, as the year-over-year decline in conversion weakened the free cash flow margin; also note the filing describes an acquisition completed after the quarter that may affect future liquidity.