Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, free cash flow turned strongly positive, driven by a large sequential increase in operating cash flow while capital expenditure declined. The free cash flow margin exceeded revenue, reflecting the outsized cash generation relative to sales.
- Operating cash flow was substantially higher than revenue, resulting in free cash flow that surpassed revenue and a margin above one hundred percent. Capital expenditure, while higher than a year ago, was lower than the prior quarter, further supporting the improved free cash flow.
- Compared to the prior quarter, revenue was stable but operating cash flow improved sharply, converting a free cash flow deficit into a surplus. Versus the same quarter last year, revenue was slightly lower yet operating cash flow was significantly higher, and free cash flow increased substantially, though capital expenditure was also higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$560.1M
Trailing twelve-month free cash flow.
Quarter free cash flow
$2.1B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$2.7B
Cash generated by operations before capital spending.
CapEx
$619.7M
Capital spending and related asset purchases.
FCF margin
135.2%
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 | $816.4M | $288.8M | $536.0M | -$247.2M | -30.3% |
| 2022-09-30 | $722.6M | $48.3M | $718.4M | -$670.1M | -92.7% |
| 2022-12-31 | $1.5B | $188.9M | $795.7M | -$606.8M | -40.9% |
| 2023-03-31 | $1.5B | $2.7B | $619.7M | $2.1B | 135.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 582.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 40.2% | 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 Surge
Operating cash flow increased substantially from both the prior quarter and the year-ago quarter, propelling free cash flow from a deficit to a strong surplus. This was the strongest observable driver of the quarter's performance.
The improvement in operating cash flow was the primary factor behind the substantial free cash flow and the elevated free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially higher than revenue, resulting in free cash flow that surpassed revenue and a margin above one hundred percent. Capital expenditure, while higher than a year ago, was lower than the prior quarter, further supporting the improved free cash flow.
Compared to the prior quarter, revenue was stable but operating cash flow improved sharply, converting a free cash flow deficit into a surplus. Versus the same quarter last year, revenue was slightly lower yet operating cash flow was significantly higher, and free cash flow increased substantially, though capital expenditure was also higher.
Monitor the company's reliance on external financing, as the liquidity section notes the use of commercial paper and credit facilities to supplement internal cash flows.