Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was higher than the prior quarter but lower than the same quarter last year. Operating cash flow and free cash flow declined compared to both periods, resulting in a lower free cash flow margin.
- The conversion of revenue into operating cash flow weakened, as operating cash flow decreased relative to revenue. Capital expenditure remained stable, so the decline in free cash flow was driven by lower operating cash flow, leading to a reduced free cash flow margin.
- Compared to the immediately preceding quarter, revenue improved but operating cash flow and free cash flow were lower. Versus the same quarter one year earlier, all metrics were lower, with free cash flow margin declining significantly.
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
$263.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$288.4M
Cash generated by operations before capital spending.
CapEx
$24.6M
Capital spending and related asset purchases.
FCF margin
6.1%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-12-31 | $4.3B | $288.4M | $24.6M | $263.8M | 6.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 37.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | $1.7B | 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 both sequentially and year-over-year, while revenue showed mixed trends. The company's liquidity discussion notes reliance on internally-generated funds and monitoring of financial conditions, highlighting the importance of this metric.
Lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into operating cash flow weakened, as operating cash flow decreased relative to revenue. Capital expenditure remained stable, so the decline in free cash flow was driven by lower operating cash flow, leading to a reduced free cash flow margin.
Compared to the immediately preceding quarter, revenue improved but operating cash flow and free cash flow were lower. Versus the same quarter one year earlier, all metrics were lower, with free cash flow margin declining significantly.
Monitor the trajectory of operating cash flow, as it is the primary component affecting free cash flow.