Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than both the prior quarter and the same quarter last year, yet free cash flow improved significantly year over year due to a higher operating cash flow and reduced capital expenditure. The free cash flow margin strengthened compared to the year-ago period but weakened sequentially.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than the year-ago quarter. The conversion of revenue into free cash flow was supported by operating cash flow that was substantially larger than capital spending.
- Compared to the prior quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and free cash flow margin were higher, while capital expenditure was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$274.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$305.8M
Cash generated by operations before capital spending.
CapEx
$31.3M
Capital spending and related asset purchases.
FCF margin
25.6%
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 | $1.4B | $236.3M | $141.7M | $94.6M | 6.7% |
| 2022-12-30 | $1.3B | $773.4M | $63.5M | $709.9M | 53.4% |
| 2023-03-31 | $1.2B | $411.7M | $45.4M | $366.3M | 31.8% |
| 2023-06-30 | $1.1B | $305.8M | $31.3M | $274.5M | 25.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 140.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$620.0M | 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 Strength
Operating cash flow was higher year over year despite lower revenue, which was the primary factor behind the improved free cash flow. The filing notes that cash provided by operating activities increased due to favorable changes in working capital, particularly a decrease in accounts receivable.
This driver directly lifted free cash flow and margin compared to the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than the year-ago quarter. The conversion of revenue into free cash flow was supported by operating cash flow that was substantially larger than capital spending.
Compared to the prior quarter, revenue, operating cash flow, capital expenditure, free cash flow, and free cash flow margin all decreased. Versus the same quarter one year earlier, revenue was lower, but operating cash flow, free cash flow, and free cash flow margin were higher, while capital expenditure was lower.
Monitor whether operating cash flow can sustain its year-over-year improvement given the sequential decline in revenue.