Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the third quarter, free cash flow was stable relative to the same period last year, but the margin narrowed as revenue grew faster. Compared to the prior quarter, operating cash flow and free cash flow both declined, despite a slight revenue increase.
- Revenue increased sequentially and year-over-year, but operating cash flow did not keep pace, resulting in a lower free cash flow margin both sequentially and compared to the same quarter last year.
- Compared to the preceding quarter, revenue was slightly higher while operating cash flow and free cash flow were both lower, weakening the free cash flow margin. Versus the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were nearly unchanged, leading to a lower margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$469.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
$120.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$127.4M
Cash generated by operations before capital spending.
CapEx
$6.9M
Capital spending and related asset purchases.
FCF margin
14.3%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $661.4M | $123.4M | $7.7M | $115.7M | 17.5% |
| 2023-03-31 | $658.0M | $100.8M | $7.6M | $93.1M | 14.2% |
| 2023-06-30 | $820.8M | $147.4M | $6.8M | $140.6M | 17.1% |
| 2023-09-30 | $840.4M | $127.4M | $6.9M | $120.5M | 14.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 94.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.8% | 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.
Revenue Growth Outpacing Cash Flow
Revenue continued to rise both sequentially and year-over-year, serving as the primary growth driver. However, operating cash flow did not expand at the same rate, compressing the free cash flow margin. Filing context notes the company holds cash across multiple banks and is expanding internationally, but these factors do not alter the observable cash conversion pattern.
If operating cash flow does not accelerate, future free cash flow margins may remain under pressure despite revenue growth.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased sequentially and year-over-year, but operating cash flow did not keep pace, resulting in a lower free cash flow margin both sequentially and compared to the same quarter last year.
Compared to the preceding quarter, revenue was slightly higher while operating cash flow and free cash flow were both lower, weakening the free cash flow margin. Versus the same quarter one year earlier, revenue was higher, but operating cash flow and free cash flow were nearly unchanged, leading to a lower margin.
Monitor whether operating cash flow can align with revenue growth, as the current trend shows a widening gap.