Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow for the quarter ended June 30, 2023 was higher than both the preceding quarter and the same quarter one year earlier. The improvement was driven primarily by stronger operating cash flow, resulting in a higher free cash flow margin compared to the prior quarter, though the margin was lower than the year-ago quarter.
- Revenue remained stable compared to the preceding quarter but increased relative to the year-ago quarter. Operating cash flow rose more sharply than capital expenditure, leading to a higher free cash flow and an improved free cash flow margin versus the prior quarter.
- Compared to the preceding quarter, free cash flow and free cash flow margin both improved. Compared to the same quarter one year earlier, free cash flow was higher while free cash flow margin was lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$4.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$15.0M
Capital spending and related asset purchases.
FCF margin
35.9%
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 | $2.4B | $1.4B | $14.0M | $1.4B | 57.3% |
| 2022-12-31 | $3.1B | $982.0M | $13.0M | $969.0M | 31.6% |
| 2023-03-31 | $3.2B | $963.0M | $11.0M | $952.0M | 30.1% |
| 2023-06-30 | $3.2B | $1.2B | $15.0M | $1.1B | 35.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 169.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.5% | 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 for the quarter was substantially higher than both the prior quarter and the year-ago quarter, outpacing the increase in capital expenditure. This was the strongest observable driver of free cash flow improvement.
The higher operating cash flow directly raised free cash flow and improved the free cash flow margin compared to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue remained stable compared to the preceding quarter but increased relative to the year-ago quarter. Operating cash flow rose more sharply than capital expenditure, leading to a higher free cash flow and an improved free cash flow margin versus the prior quarter.
Compared to the preceding quarter, free cash flow and free cash flow margin both improved. Compared to the same quarter one year earlier, free cash flow was higher while free cash flow margin was lower.
Monitor whether free cash flow margin stabilizes or continues to shift relative to the year-ago level.