Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was stable compared to the prior quarter, while operating cash flow and free cash flow decreased, leading to a lower free cash flow margin. Compared to the same quarter last year, all cash flow metrics improved significantly, with a higher free cash flow margin.
- Operating cash flow as a proportion of revenue weakened from the prior quarter, resulting in a lower free cash flow margin despite capital expenditure being slightly higher. The conversion from revenue to free cash flow was stronger than the same quarter one year earlier.
- Compared to the immediately preceding quarter, revenue was essentially unchanged, but operating cash flow and free cash flow were lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$572.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$164.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$169.2M
Cash generated by operations before capital spending.
CapEx
$5.1M
Capital spending and related asset purchases.
FCF margin
30.3%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $507.9M | $38.5M | $9.5M | $29.0M | 5.7% |
| 2022-12-31 | $465.9M | $180.9M | $9.2M | $171.7M | 36.9% |
| 2023-03-31 | $542.2M | $210.9M | $3.8M | $207.2M | 38.2% |
| 2023-06-30 | $542.3M | $169.2M | $5.1M | $164.1M | 30.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 267.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year cash flow improvement
Operating cash flow and free cash flow were substantially higher compared to the same quarter one year earlier, with free cash flow margin also improving. This was supported by higher revenue and a larger proportion of revenue converted into operating cash flow.
The year-over-year increase in free cash flow strengthened the company's cash generation capacity relative to the prior year period.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened from the prior quarter, resulting in a lower free cash flow margin despite capital expenditure being slightly higher. The conversion from revenue to free cash flow was stronger than the same quarter one year earlier.
Compared to the immediately preceding quarter, revenue was essentially unchanged, but operating cash flow and free cash flow were lower, and the free cash flow margin weakened. Versus the same quarter one year earlier, revenue, operating cash flow, free cash flow, and free cash flow margin were all higher.
Monitor the trend in operating cash flow relative to revenue, as it declined from the prior quarter despite stable revenue.