Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow was higher than both the prior quarter and the same period one year earlier, driven by a strong increase in operating cash flow. Revenue was lower than the year-ago quarter but higher than the prior quarter, while the free cash flow margin improved compared to both periods.
- Operating cash flow was substantially higher than the prior quarter, and capital expenditure remained stable, resulting in a large increase in free cash flow. The free cash flow margin improved significantly compared to both the prior quarter and the same quarter one year earlier, reflecting stronger cash conversion from revenue.
- Revenue was lower than the same quarter one year earlier but higher than the immediately preceding quarter. Operating cash flow and free cash flow were higher than both the prior quarter and the year-ago quarter, while capital expenditure was lower than the year-ago period and similar to the prior quarter.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$411.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$202.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$208.7M
Cash generated by operations before capital spending.
CapEx
$6.4M
Capital spending and related asset purchases.
FCF margin
22.1%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $941.2M | $48.8M | $14.0M | $34.8M | 3.7% |
| 2022-09-30 | $884.9M | $83.3M | $8.1M | $75.2M | 8.5% |
| 2022-12-30 | $856.5M | $106.1M | $6.6M | $99.5M | 11.6% |
| 2023-03-31 | $915.4M | $208.7M | $6.4M | $202.3M | 22.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 157.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Higher Operating Cash Flow
Operating cash flow increased compared to both the prior quarter and the year-ago quarter, driven by factors such as lower accounts receivable and lower inventory purchases, as noted in the filing. This was the primary contributor to the rise in free cash flow.
The higher operating cash flow directly lifted free cash flow and the free cash flow margin to levels above both comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially higher than the prior quarter, and capital expenditure remained stable, resulting in a large increase in free cash flow. The free cash flow margin improved significantly compared to both the prior quarter and the same quarter one year earlier, reflecting stronger cash conversion from revenue.
Revenue was lower than the same quarter one year earlier but higher than the immediately preceding quarter. Operating cash flow and free cash flow were higher than both the prior quarter and the year-ago quarter, while capital expenditure was lower than the year-ago period and similar to the prior quarter.
Monitor the timing of billings and deferred revenue, as the filing noted a decrease in deferred revenue partially offset the operating cash flow improvement.