Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow margin tightened from the prior quarter but improved versus the same quarter last year. Revenue was lower sequentially while operating cash flow declined, leading to a narrower margin.
- Operating cash flow converted to free cash flow after capital expenditure, yielding a free cash flow margin that was higher than the year-ago quarter but lower than the prior quarter. The relationship between revenue and operating cash flow weakened sequentially.
- Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the margin weakened. Relative to the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were higher, resulting in an improved margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$543.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$97.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$118.5M
Cash generated by operations before capital spending.
CapEx
$21.2M
Capital spending and related asset purchases.
FCF margin
9.9%
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 |
|---|---|---|---|---|---|
| 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% |
| 2023-12-31 | $984.6M | $118.5M | $21.2M | $97.3M | 9.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 46.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.8B | 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 Sequential Decline
Operating cash flow decreased from the prior quarter, while capital expenditure increased modestly, leading to a larger drop in free cash flow. This sequential weakening is the strongest observable driver of the quarter's cash conversion performance.
The decline in operating cash flow was the primary factor compressing free cash flow and margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted to free cash flow after capital expenditure, yielding a free cash flow margin that was higher than the year-ago quarter but lower than the prior quarter. The relationship between revenue and operating cash flow weakened sequentially.
Compared to the immediately preceding quarter, revenue, operating cash flow, and free cash flow were all lower, and the margin weakened. Relative to the same quarter one year earlier, revenue was lower but operating cash flow and free cash flow were higher, resulting in an improved margin.
Monitor the trend in operating cash flow relative to revenue, as it declined sequentially despite a smaller revenue drop.