Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both increased from the prior quarter and from the same quarter last year. Free cash flow margin weakened compared to both periods due to higher capital expenditure relative to operating cash flow.
- Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure consumed a larger share of operating cash flow than in either comparison period, resulting in a free cash flow margin that was lower than both.
- Compared to the prior quarter, revenue was higher but free cash flow was lower and the margin weakened. Compared to the same quarter last year, revenue and operating cash flow were higher, while free cash flow was slightly lower and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$737.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$902.0M
Cash generated by operations before capital spending.
CapEx
$165.0M
Capital spending and related asset purchases.
FCF margin
35.2%
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 | $1.8B | $433.0M | $151.0M | $282.0M | 16.1% |
| 2022-09-30 | $1.8B | $265.0M | $162.0M | $103.0M | 5.6% |
| 2022-12-31 | $1.9B | $1.2B | $144.0M | $1.0B | 52.5% |
| 2023-03-31 | $2.1B | $902.0M | $165.0M | $737.0M | 35.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 491.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.9% | 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.
Capital Expenditure Increase
Capital expenditure was higher than both the prior quarter and the year-ago quarter, reducing free cash flow despite higher operating cash flow. The filing notes that cash outflows include investments in services and core technologies to enhance the platform.
Higher capital expenditure was the strongest observable driver of the weakened free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter but higher than the year-ago quarter. Capital expenditure consumed a larger share of operating cash flow than in either comparison period, resulting in a free cash flow margin that was lower than both.
Compared to the prior quarter, revenue was higher but free cash flow was lower and the margin weakened. Compared to the same quarter last year, revenue and operating cash flow were higher, while free cash flow was slightly lower and the margin weakened.
Monitor the trend in capital expenditure relative to operating cash flow, as it was the primary factor behind the margin decline.