Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly from the prior quarter and the year-ago quarter, driven by a sharp increase in operating cash flow. The free cash flow margin strengthened as revenue remained stable while cash generation accelerated.
- Revenue was nearly unchanged from the prior quarter, but operating cash flow rose substantially, lifting free cash flow and the free cash flow margin. Capital expenditure increased compared with both the prior quarter and the year-ago quarter, yet the growth in operating cash flow more than offset the higher investment outlay.
- Compared with the prior quarter, free cash flow and the free cash flow margin both improved, as operating cash flow increased while revenue was slightly lower. Versus the same quarter one year earlier, free cash flow and the margin were higher, supported by stronger operating cash flow despite a larger capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$420.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$134.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$230.1M
Cash generated by operations before capital spending.
CapEx
$95.8M
Capital spending and related asset purchases.
FCF margin
18.0%
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 | $708.7M | $230.8M | $94.9M | $135.9M | 19.2% |
| 2023-03-31 | $716.6M | $138.1M | $82.1M | $56.0M | 7.8% |
| 2023-06-30 | $753.8M | $169.2M | $75.4M | $93.8M | 12.4% |
| 2023-09-30 | $747.4M | $230.1M | $95.8M | $134.3M | 18.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 83.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 12.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | $691.3M | 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 Surge
Operating cash flow rose sharply from both the prior quarter and the year-ago quarter, driving the improvement in free cash flow and margin. The filing notes favorable working capital management for the nine-month period, which contributed to the increase.
The stronger operating cash flow was the primary factor behind the higher free cash flow and margin, even as capital expenditure increased.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was nearly unchanged from the prior quarter, but operating cash flow rose substantially, lifting free cash flow and the free cash flow margin. Capital expenditure increased compared with both the prior quarter and the year-ago quarter, yet the growth in operating cash flow more than offset the higher investment outlay.
Compared with the prior quarter, free cash flow and the free cash flow margin both improved, as operating cash flow increased while revenue was slightly lower. Versus the same quarter one year earlier, free cash flow and the margin were higher, supported by stronger operating cash flow despite a larger capital expenditure.
Monitor the trend in capital expenditure, which has increased in each of the three reported quarters, as it directly affects the conversion of operating cash flow into free cash flow.