Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than the same quarter last year but higher than the prior quarter. Operating cash flow and free cash flow improved compared to both the prior quarter and the year-ago quarter, resulting in a stronger free cash flow margin.
- Operating cash flow as a proportion of revenue was higher than both the prior quarter and the year-ago quarter, while capital expenditure remained relatively stable. This led to a free cash flow margin that improved sequentially and year-over-year.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, with free cash flow margin improving. Versus the same quarter last year, revenue was lower, but operating cash flow and free cash flow were higher, and free cash flow margin strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$24.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$6.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$6.3B
Cash generated by operations before capital spending.
CapEx
$178.0M
Capital spending and related asset purchases.
FCF margin
44.3%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $14.8B | $7.6B | $177.0M | $7.4B | 50.1% |
| 2022-12-31 | $15.1B | $7.4B | $213.0M | $7.2B | 47.7% |
| 2023-03-31 | $12.2B | $4.2B | $175.0M | $4.0B | 32.9% |
| 2023-06-30 | $13.9B | $6.3B | $178.0M | $6.1B | 44.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 303.4% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.3% | 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 was lower than the year-ago period. The filing notes that operating cash flows for the six-month period increased due to the timing of working capital, partially offset by lower net revenues and higher income tax payments.
The higher operating cash flow was the primary factor behind the improved free cash flow and 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 was higher than both the prior quarter and the year-ago quarter, while capital expenditure remained relatively stable. This led to a free cash flow margin that improved sequentially and year-over-year.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow were all higher, with free cash flow margin improving. Versus the same quarter last year, revenue was lower, but operating cash flow and free cash flow were higher, and free cash flow margin strengthened.
Monitor the trend in revenue relative to operating cash flow, as revenue declined year-over-year while cash generation improved.