Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved compared to the same quarter last year, driven by stronger operating cash flow, but weakened from the prior quarter due to lower cash generation from operations. The free cash flow margin expanded significantly versus the year-ago period while contracting from the immediately preceding quarter.
- Revenue increased compared to both the prior quarter and the same quarter last year. Operating cash flow rose sharply year-over-year but fell from the previous quarter. Capital expenditure was lower than the year-ago period and higher than the prior quarter. These changes resulted in free cash flow and free cash flow margin that were higher than a year earlier but lower than the preceding quarter.
- Compared to the immediately preceding quarter, free cash flow and free cash flow margin weakened due to lower operating cash flow despite higher revenue. Versus the same quarter one year earlier, free cash flow and free cash flow margin improved substantially, supported by a much higher level of operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$506.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$129.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$142.4M
Cash generated by operations before capital spending.
CapEx
$12.6M
Capital spending and related asset purchases.
FCF margin
13.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $993.6M | $142.4M | $12.6M | $129.8M | 13.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 291.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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.
Year-over-year operating cash flow improvement
Operating cash flow increased substantially compared to the same quarter a year ago, with a reduction in inventory purchases, incentive compensation payouts, accounts receivable, and tax payments cited as contributing factors in the filing's liquidity discussion. This supported a sizable increase in free cash flow despite higher revenue and capital expenditure.
The improvement in operating cash flow was the strongest observable driver of the year-over-year free cash flow increase.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased compared to both the prior quarter and the same quarter last year. Operating cash flow rose sharply year-over-year but fell from the previous quarter. Capital expenditure was lower than the year-ago period and higher than the prior quarter. These changes resulted in free cash flow and free cash flow margin that were higher than a year earlier but lower than the preceding quarter.
Compared to the immediately preceding quarter, free cash flow and free cash flow margin weakened due to lower operating cash flow despite higher revenue. Versus the same quarter one year earlier, free cash flow and free cash flow margin improved substantially, supported by a much higher level of operating cash flow.
Monitor the trend in operating cash flow, which showed a significant decline from the prior quarter while remaining elevated versus the year-ago period.