Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and cash generation both improved sequentially and versus the same period last year. Free cash flow margin widened significantly, reflecting stronger operating cash flow while capital spending remained limited.
- Operating cash flow converted into free cash flow after minimal capital expenditure, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. The relationship between revenue growth and operating cash flow improvement drove the margin expansion.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Versus the same quarter one year earlier, each of these metrics was higher, with the margin also strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$474.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$131.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$133.4M
Cash generated by operations before capital spending.
CapEx
$1.6M
Capital spending and related asset purchases.
FCF margin
23.6%
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 | $508.6M | $78.8M | $4.9M | $73.8M | 14.5% |
| 2023-03-31 | $525.2M | $187.4M | $4.8M | $182.6M | 34.8% |
| 2023-06-30 | $533.3M | $90.2M | $3.9M | $86.3M | 16.2% |
| 2023-09-30 | $558.2M | $133.4M | $1.6M | $131.9M | 23.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 184.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.3% | 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 Improvement
Operating cash flow increased compared to both the prior quarter and the year-ago quarter. This was the strongest observable driver, as it lifted free cash flow and margin without a significant change in capital expenditure.
The higher operating cash flow directly supported a wider free cash flow margin and a larger absolute free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted into free cash flow after minimal capital expenditure, resulting in a free cash flow margin that was higher than both the prior quarter and the year-ago quarter. The relationship between revenue growth and operating cash flow improvement drove the margin expansion.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all higher, and free cash flow margin improved. Versus the same quarter one year earlier, each of these metrics was higher, with the margin also strengthened.
Monitor whether operating cash flow can sustain its elevated level relative to revenue in future periods.