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, driven by lower operating cash flow. Revenue was stable compared to the prior quarter but higher than a year ago.
- Operating cash flow as a proportion of revenue weakened, leading to a lower free cash flow margin. Capital expenditure remained relatively stable, so the decline in free cash flow was primarily due to reduced cash generation from operations.
- Compared to the prior quarter, revenue was slightly lower while operating cash flow and free cash flow both decreased. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$858.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$179.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$258.0M
Cash generated by operations before capital spending.
CapEx
$79.0M
Capital spending and related asset purchases.
FCF margin
5.4%
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 |
|---|---|---|---|---|---|
| 2022-12-31 | $3.6B | $527.0M | $162.0M | $365.0M | 10.0% |
| 2023-04-01 | $3.0B | $163.0M | $62.0M | $101.0M | 3.3% |
| 2023-07-01 | $3.4B | $296.0M | $83.0M | $213.0M | 6.2% |
| 2023-09-30 | $3.3B | $258.0M | $79.0M | $179.0M | 5.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 66.5% | 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 Decline
Operating cash flow decreased compared to both the prior quarter and the same quarter last year, despite revenue being higher year-over-year. This was the strongest observable driver of the lower free cash flow.
The decline in operating cash flow directly reduced free cash flow and compressed the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue weakened, leading to a lower free cash flow margin. Capital expenditure remained relatively stable, so the decline in free cash flow was primarily due to reduced cash generation from operations.
Compared to the prior quarter, revenue was slightly lower while operating cash flow and free cash flow both decreased. Versus the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin.
Monitor the trend in operating cash flow, as its decline was the primary factor behind the lower free cash flow.