Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow declined from both the prior quarter and the same quarter last year, as operating cash flow decreased despite a slight increase in revenue. The free cash flow margin also weakened compared to both periods.
- Revenue was higher than the prior quarter and the year-ago quarter, but operating cash flow was lower, resulting in a lower free cash flow. Capital expenditure increased from the prior quarter but was similar to the year-ago level.
- Compared to the immediately preceding quarter, revenue improved, while operating cash flow, free cash flow, and free cash flow margin all declined. Compared to the same quarter one year earlier, the same pattern was observed: revenue higher, but cash generation metrics lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$323.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$394.8M
Cash generated by operations before capital spending.
CapEx
$71.7M
Capital spending and related asset purchases.
FCF margin
20.1%
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 | $1.6B | $767.6M | $54.4M | $713.2M | 44.9% |
| 2022-12-31 | $1.5B | -$135.2M | $60.4M | -$195.6M | -12.8% |
| 2023-03-31 | $1.5B | $511.7M | $60.7M | $451.0M | 29.3% |
| 2023-06-30 | $1.6B | $394.8M | $71.7M | $323.1M | 20.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 67.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | 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.
Decline in Operating Cash Flow
Operating cash flow decreased from the prior quarter and from the same quarter one year earlier, while revenue increased. The company's filing notes that revenues are derived from investment advisory services and are affected by changes in assets under management and market conditions. This quarter's operating cash flow was lower than both prior periods, directly reducing free cash flow.
The decline in operating cash flow was the primary factor behind the lower free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the prior quarter and the year-ago quarter, but operating cash flow was lower, resulting in a lower free cash flow. Capital expenditure increased from the prior quarter but was similar to the year-ago level.
Compared to the immediately preceding quarter, revenue improved, while operating cash flow, free cash flow, and free cash flow margin all declined. Compared to the same quarter one year earlier, the same pattern was observed: revenue higher, but cash generation metrics lower.
Monitor the relationship between revenue growth and operating cash flow, as the latter has not kept pace with the former.