Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned sharply positive from negative a year earlier, driven by a large increase in operating cash flow while capital spending rose modestly. Revenue grew slightly from the prior quarter, but free cash flow margin edged lower as operating cash flow decreased.
- Revenue held steady relative to the previous quarter, yet operating cash flow softened, causing free cash flow to contract slightly. The free cash flow margin weakened marginally, but the sequential comparison remained stable compared to the year-ago period, when cash conversion was deeply negative.
- Compared to the immediate prior quarter, free cash flow was slightly lower driven by a small drop in operating cash flow, while capital expenditure was broadly flat. Versus the same quarter a year earlier, free cash flow improved markedly from negative to positive, reflecting a substantial rise in operating cash flow.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$606.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$222.2M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$248.7M
Cash generated by operations before capital spending.
CapEx
$26.5M
Capital spending and related asset purchases.
FCF margin
12.8%
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 | $1.7B | $180.7M | $38.3M | $142.4M | 8.6% |
| 2023-03-31 | $1.5B | $42.0M | $27.8M | $14.2M | 0.9% |
| 2023-06-30 | $1.7B | $253.6M | $25.8M | $227.8M | 13.1% |
| 2023-09-30 | $1.7B | $248.7M | $26.5M | $222.2M | 12.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 236.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$2.4B | 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
The most observable driver is the sharp improvement in operating cash flow compared to the year-ago quarter, which reversed a deeply negative free cash flow position. This improvement was not matched by a proportional increase in capital spending.
The recovery in operating cash flow was the primary factor that brought free cash flow to a positive level from a negative one year ago.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue held steady relative to the previous quarter, yet operating cash flow softened, causing free cash flow to contract slightly. The free cash flow margin weakened marginally, but the sequential comparison remained stable compared to the year-ago period, when cash conversion was deeply negative.
Compared to the immediate prior quarter, free cash flow was slightly lower driven by a small drop in operating cash flow, while capital expenditure was broadly flat. Versus the same quarter a year earlier, free cash flow improved markedly from negative to positive, reflecting a substantial rise in operating cash flow.
Monitor the level of operating cash flow given its sequential decrease after a year-ago period of very low conversion.