Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin weakened sharply from the prior quarter but improved compared to the same quarter last year. Operating cash flow was the primary driver of the sequential decline, while capital expenditure remained relatively stable.
- Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow decreased significantly from the prior quarter but increased compared to the same quarter last year. Capital expenditure was slightly higher than the prior quarter and lower than the year-ago quarter. Free cash flow and free cash flow margin followed the operating cash flow trend, weakening sequentially but improving year over year.
- Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a lower operating cash flow. Compared to the same quarter one year earlier, free cash flow and margin were higher, supported by a higher operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$516.7M
Trailing twelve-month free cash flow.
Quarter free cash flow
$142.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$162.2M
Cash generated by operations before capital spending.
CapEx
$19.4M
Capital spending and related asset purchases.
FCF margin
14.2%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $1.0B | $92.8M | $22.0M | $70.8M | 7.1% |
| 2023-03-31 | $1.0B | -$106.6M | $16.6M | -$123.2M | -12.0% |
| 2023-06-30 | $1.1B | $445.1M | $18.8M | $426.3M | 39.4% |
| 2023-09-30 | $1.0B | $162.2M | $19.4M | $142.8M | 14.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 108.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.9B | 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 Volatility
Operating cash flow decreased substantially from the prior quarter, causing free cash flow to decline despite a relatively stable capital expenditure. The year-over-year comparison shows improvement, but the sequential drop is the strongest observable driver of the current quarter's cash conversion.
The sequential weakening in operating cash flow directly reduced free cash flow and margin from the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the prior quarter and the year-ago quarter. Operating cash flow decreased significantly from the prior quarter but increased compared to the same quarter last year. Capital expenditure was slightly higher than the prior quarter and lower than the year-ago quarter. Free cash flow and free cash flow margin followed the operating cash flow trend, weakening sequentially but improving year over year.
Compared to the immediately preceding quarter, free cash flow and margin were lower, driven by a lower operating cash flow. Compared to the same quarter one year earlier, free cash flow and margin were higher, supported by a higher operating cash flow.
Monitor the magnitude of operating cash flow relative to revenue in subsequent quarters, as it was the primary factor behind the sequential decline in free cash flow.