Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than the prior quarter but higher than the same quarter last year. Free cash flow margin improved compared to both the prior quarter and the year-ago quarter.
- Operating cash flow exceeded capital expenditure by a wide margin, resulting in a free cash flow margin that was higher than the revenue growth rate would suggest. The conversion from revenue to free cash flow was strong relative to both comparison periods.
- Compared to the prior quarter, revenue was lower but operating cash flow was higher, and capital expenditure was significantly lower, leading to a higher free cash flow and margin. Versus the same quarter last year, revenue was higher, operating cash flow was higher, capital expenditure was slightly higher, and free cash flow and margin were both higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$505.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$178.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$187.6M
Cash generated by operations before capital spending.
CapEx
$9.2M
Capital spending and related asset purchases.
FCF margin
46.6%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $377.0M | $91.8M | $4.1M | $87.6M | 23.2% |
| 2022-09-30 | $394.8M | $137.3M | $23.9M | $113.4M | 28.7% |
| 2022-12-31 | $490.7M | $173.5M | $47.8M | $125.7M | 25.6% |
| 2023-03-31 | $382.8M | $187.6M | $9.2M | $178.4M | 46.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1913.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | 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.
Operating Cash Flow Strength
Operating cash flow increased compared to both the prior quarter and the year-ago quarter, even as revenue declined sequentially. This was the strongest observable driver of free cash flow improvement.
Higher operating cash flow, combined with lower capital expenditure, drove free cash flow and margin higher.
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 revenue growth rate would suggest. The conversion from revenue to free cash flow was strong relative to both comparison periods.
Compared to the prior quarter, revenue was lower but operating cash flow was higher, and capital expenditure was significantly lower, leading to a higher free cash flow and margin. Versus the same quarter last year, revenue was higher, operating cash flow was higher, capital expenditure was slightly higher, and free cash flow and margin were both higher.
Monitor the level of capital expenditure relative to operating cash flow, as a significant decline in capex contributed to the margin improvement this quarter.