Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved compared to the same quarter last year, driven by higher operating cash flow while revenue remained stable. However, sequentially, free cash flow declined as both revenue and operating cash flow were lower.
- Revenue was stable compared to the prior year, but operating cash flow increased, resulting in higher free cash flow and an improved free cash flow margin. Sequentially, revenue decreased and operating cash flow declined more sharply, leading to a lower free cash flow margin despite slightly higher capital expenditure.
- Compared to the prior quarter, free cash flow margin weakened as revenue and operating cash flow both fell. Versus the same quarter a year ago, the margin strengthened significantly due to higher operating cash flow on flat revenue.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.0B
Trailing twelve-month free cash flow.
Quarter free cash flow
$434.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$532.4M
Cash generated by operations before capital spending.
CapEx
$97.7M
Capital spending and related asset purchases.
FCF margin
14.6%
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 | $3.1B | $542.5M | $91.1M | $451.4M | 14.4% |
| 2022-09-30 | $3.3B | $576.0M | $121.0M | $455.0M | 13.8% |
| 2022-12-31 | $3.2B | $705.3M | $93.6M | $611.7M | 18.9% |
| 2023-03-31 | $3.0B | $532.4M | $97.7M | $434.7M | 14.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 99.0% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | 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 improvement
Operating cash flow was higher than the same quarter last year while revenue was unchanged, indicating stronger cash generation from operations. This improvement boosted free cash flow and margin, and contributed to the increase in cash and short-term investments noted in the filing.
The stronger operating cash flow provided a key source of liquidity and supported the company's cash position during the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was stable compared to the prior year, but operating cash flow increased, resulting in higher free cash flow and an improved free cash flow margin. Sequentially, revenue decreased and operating cash flow declined more sharply, leading to a lower free cash flow margin despite slightly higher capital expenditure.
Compared to the prior quarter, free cash flow margin weakened as revenue and operating cash flow both fell. Versus the same quarter a year ago, the margin strengthened significantly due to higher operating cash flow on flat revenue.
Monitor the trend in capital expenditure, which increased both sequentially and year-over-year, as it directly impacts free cash flow conversion.