Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The company generated positive free cash flow this quarter, reversing a deficit from the same period last year. Liquidity remained strong, supported by ample cash holdings and available credit.
- Revenue produced operating cash flow that exceeded capital expenditures, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow was efficient.
- Sequentially, revenue, operating cash flow, and free cash flow were lower, and the margin weakened. Compared to the same quarter last year, revenue was higher, and operating cash flow and free cash flow improved substantially from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$435.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$457.8M
Cash generated by operations before capital spending.
CapEx
$22.5M
Capital spending and related asset purchases.
FCF margin
10.9%
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 | $5.1B | $972.4M | $24.1M | $948.3M | 18.7% |
| 2023-03-31 | $3.6B | $711.4M | $23.7M | $687.6M | 19.2% |
| 2023-06-30 | $4.2B | $739.2M | $21.3M | $717.9M | 17.1% |
| 2023-09-30 | $4.0B | $457.8M | $22.5M | $435.3M | 10.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 68.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | 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 cash flow turnaround
Operating cash flow rebounded from a deficit a year ago to a positive figure this quarter, driving free cash flow from negative to positive and significantly improving the margin.
This shift was the strongest factor in the company's free cash flow improvement compared to the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue produced operating cash flow that exceeded capital expenditures, resulting in a positive free cash flow margin. The conversion from revenue to free cash flow was efficient.
Sequentially, revenue, operating cash flow, and free cash flow were lower, and the margin weakened. Compared to the same quarter last year, revenue was higher, and operating cash flow and free cash flow improved substantially from negative to positive.
Monitor the sustainability of operating cash flow levels given the sequential decline from the prior quarter.