Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply from the prior quarter, driven by higher operating cash flow and lower capital expenditure. Compared to the same quarter last year, free cash flow and margin were lower despite a slight revenue decline.
- Revenue was slightly higher than the prior quarter, while operating cash flow increased substantially, leading to a much higher free cash flow and margin. Capital expenditure was lower than both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, free cash flow and margin improved markedly. Versus the same quarter one year earlier, free cash flow and margin weakened, as operating cash flow was lower despite a modest revenue decline.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$748.8M
Trailing twelve-month free cash flow.
Quarter free cash flow
$304.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$365.3M
Cash generated by operations before capital spending.
CapEx
$61.2M
Capital spending and related asset purchases.
FCF margin
46.7%
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 | $612.8M | $130.2M | $69.2M | $61.0M | 10.0% |
| 2022-09-30 | $610.1M | $280.2M | $65.8M | $214.4M | 35.1% |
| 2022-12-31 | $630.5M | $249.0M | $79.7M | $169.3M | 26.9% |
| 2023-03-31 | $651.6M | $365.3M | $61.2M | $304.1M | 46.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 540.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 9.4% | 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 Recovery
Operating cash flow rose substantially from the prior quarter, driving a large improvement in free cash flow and margin. This was the strongest observable driver of the quarter's cash conversion.
The increase in operating cash flow was the primary reason free cash flow and margin improved sequentially.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly higher than the prior quarter, while operating cash flow increased substantially, leading to a much higher free cash flow and margin. Capital expenditure was lower than both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, free cash flow and margin improved markedly. Versus the same quarter one year earlier, free cash flow and margin weakened, as operating cash flow was lower despite a modest revenue decline.
Monitor the trend in operating cash flow relative to revenue, as it was the primary factor behind the quarter's cash conversion swing.