Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was slightly lower than a year earlier, while operating cash flow and free cash flow decreased sharply from both the prior quarter and the same quarter last year. The cash conversion rate weakened substantially, and the free cash flow margin contracted.
- Operating cash flow was substantially lower than revenue, leading to a free cash flow margin that was markedly weaker than both the preceding quarter and the same quarter a year ago.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue was slightly lower, while operating cash flow, free cash flow, and margin were substantially lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$720.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$344.0M
Capital spending and related asset purchases.
FCF margin
11.8%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $6.6B | $1.9B | $246.0M | $1.7B | 25.5% |
| 2022-09-30 | $6.7B | $3.0B | $160.0M | $2.8B | 42.4% |
| 2022-12-31 | $6.8B | $2.6B | $340.0M | $2.3B | 33.8% |
| 2023-03-31 | $6.1B | $1.1B | $344.0M | $720.0M | 11.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 25.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 5.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$30.0B | 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 weakening
Capital expenditure was stable relative to the prior quarter, but operating cash flow declined sharply, driving a substantial drop in free cash flow and margin.
The decline in operating cash flow was the strongest observable driver of the reduction in free cash flow and margin this quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially lower than revenue, leading to a free cash flow margin that was markedly weaker than both the preceding quarter and the same quarter a year ago.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Versus the same quarter one year earlier, revenue was slightly lower, while operating cash flow, free cash flow, and margin were substantially lower.
Monitor the trajectory of operating cash flow relative to revenue, as the gap between them widened significantly this quarter.