Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Operating cash flow rose year over year, driving free cash flow higher despite a sequential decline from the prior quarter. The free cash flow margin improved from the same quarter a year ago but fell relative to the immediately preceding quarter.
- Revenue decreased sequentially while operating cash flow declined more sharply, resulting in a lower free cash flow margin. Compared to the same quarter a year ago, revenue was higher and operating cash flow grew, lifting both free cash flow and margin.
- Compared to the prior quarter, free cash flow was lower due to a larger decline in operating cash flow relative to capital expenditure. Relative to the year-ago quarter, free cash flow was higher as operating cash flow improved more than capital expenditure increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$796.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$130.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$153.3M
Cash generated by operations before capital spending.
CapEx
$23.2M
Capital spending and related asset purchases.
FCF margin
14.0%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $978.4M | $219.2M | $43.2M | $175.9M | 18.0% |
| 2022-09-30 | $985.8M | $245.4M | $26.8M | $218.6M | 22.2% |
| 2022-12-31 | $1.1B | $303.6M | $32.0M | $271.6M | 25.7% |
| 2023-03-31 | $928.7M | $153.3M | $23.2M | $130.1M | 14.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 69.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.5% | 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 Decline
Operating cash flow decreased significantly from the prior quarter and was also slightly below the year-ago quarter when revenue was lower. This was the main factor behind the sequential drop in free cash flow.
The weakening of operating cash flow constrained free cash flow generation in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue decreased sequentially while operating cash flow declined more sharply, resulting in a lower free cash flow margin. Compared to the same quarter a year ago, revenue was higher and operating cash flow grew, lifting both free cash flow and margin.
Compared to the prior quarter, free cash flow was lower due to a larger decline in operating cash flow relative to capital expenditure. Relative to the year-ago quarter, free cash flow was higher as operating cash flow improved more than capital expenditure increased.
Monitor the trajectory of operating cash flow, which fell from both the prior quarter and the year-ago quarter in absolute dollar terms.