Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the quarter, free cash flow turned positive compared to a year ago but declined from the prior quarter. Revenue increased while operating cash flow decreased, resulting in a lower free cash flow margin.
- Revenue rose from both the prior quarter and the same quarter a year earlier. Operating cash flow was lower than the preceding quarter and also lower than the year-ago period, while capital expenditure increased from the prior quarter but decreased significantly from a year ago. Free cash flow and free cash flow margin improved compared to the prior year but weakened sequentially.
- Compared to the immediately preceding quarter, free cash flow was lower and the margin narrowed, reflecting lower operating cash flow and higher capital expenditure. Versus the same quarter one year earlier, free cash flow improved from negative to positive, and the margin turned positive, driven by a substantial reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$70.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$15.9M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$45.2M
Cash generated by operations before capital spending.
CapEx
$29.3M
Capital spending and related asset purchases.
FCF margin
3.1%
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 | $358.1M | $500000 | $10.5M | -$10.0M | -2.8% |
| 2023-06-30 | $396.5M | $44.0M | $15.7M | $28.3M | 7.1% |
| 2023-09-30 | $432.7M | $56.0M | $20.1M | $35.9M | 8.3% |
| 2023-12-31 | $509.8M | $45.2M | $29.3M | $15.9M | 3.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 15.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.7% | 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 decline
Operating cash flow decreased from the prior quarter even as revenue grew, indicating a lower cash conversion rate. This was the primary factor behind the sequential decline in free cash flow and margin.
If operating cash flow does not recover in line with revenue growth, free cash flow may remain under pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose from both the prior quarter and the same quarter a year earlier. Operating cash flow was lower than the preceding quarter and also lower than the year-ago period, while capital expenditure increased from the prior quarter but decreased significantly from a year ago. Free cash flow and free cash flow margin improved compared to the prior year but weakened sequentially.
Compared to the immediately preceding quarter, free cash flow was lower and the margin narrowed, reflecting lower operating cash flow and higher capital expenditure. Versus the same quarter one year earlier, free cash flow improved from negative to positive, and the margin turned positive, driven by a substantial reduction in capital expenditure.
Monitor the trajectory of capital expenditure, which increased from the prior quarter and could pressure free cash flow if it continues to rise.