Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was lower than the prior quarter but slightly improved compared to the same quarter last year. The cash conversion rate weakened sequentially due to a larger increase in revenue relative to operating cash flow.
- Revenue rose while operating cash flow declined from the prior quarter, resulting in a lower free cash flow margin. Compared to the same quarter last year, revenue and operating cash flow both increased, leading to a slightly improved free cash flow margin.
- Compared to the prior quarter, free cash flow was lower despite higher revenue, driven by a substantial decrease in operating cash flow. Versus the same quarter last year, free cash flow was slightly higher, with revenue and operating cash flow both higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$367.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$443.0M
Cash generated by operations before capital spending.
CapEx
$76.0M
Capital spending and related asset purchases.
FCF margin
9.5%
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 | $3.0B | $668.0M | $45.0M | $623.0M | 20.9% |
| 2022-09-30 | $2.7B | $1.0B | $58.0M | $988.0M | 36.6% |
| 2022-12-31 | $3.1B | $1.0B | $70.0M | $972.0M | 31.1% |
| 2023-03-31 | $3.9B | $443.0M | $76.0M | $367.0M | 9.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 34.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.0% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.2B | 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 Decline
Operating cash flow fell sharply from the prior quarter, while capital expenditure increased slightly, resulting in a lower free cash flow. This was the strongest observable driver of the sequential decline.
The lower operating cash flow reduced free cash flow more than the increase in revenue could offset.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue rose while operating cash flow declined from the prior quarter, resulting in a lower free cash flow margin. Compared to the same quarter last year, revenue and operating cash flow both increased, leading to a slightly improved free cash flow margin.
Compared to the prior quarter, free cash flow was lower despite higher revenue, driven by a substantial decrease in operating cash flow. Versus the same quarter last year, free cash flow was slightly higher, with revenue and operating cash flow both higher.
Monitor the relationship between revenue growth and operating cash flow generation, as the current quarter showed a wider gap.