Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved sequentially as operating cash flow rose, but remained below the prior year's level. The margin strengthened from the previous quarter, though it was lower than the same quarter last year.
- Revenue increased both sequentially and year over year. Operating cash flow was higher than the previous quarter but lower than the year-ago period. Capital expenditure rose compared to both periods. Consequently, free cash flow and its margin improved from the prior quarter but declined from the prior year.
- Compared to the immediately preceding quarter, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and margin. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower, while capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$553.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$724.7M
Cash generated by operations before capital spending.
CapEx
$171.2M
Capital spending and related asset purchases.
FCF margin
13.5%
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 |
|---|---|---|---|---|---|
| 2022-05-07 | $3.9B | $843.4M | $161.2M | $682.2M | 17.6% |
| 2022-11-19 | $4.0B | $793.6M | $114.4M | $679.2M | 17.0% |
| 2023-02-11 | $3.7B | $354.5M | $144.8M | $209.6M | 5.7% |
| 2023-05-06 | $4.1B | $724.7M | $171.2M | $553.5M | 13.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 85.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.2% | 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.
Sequential Operating Cash Flow Growth
Operating cash flow rose from the prior quarter, while revenue also increased. This improvement was the primary factor behind the higher free cash flow and margin.
The stronger operating cash flow drove the quarter's free cash flow improvement, reversing the prior quarter's lower margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased both sequentially and year over year. Operating cash flow was higher than the previous quarter but lower than the year-ago period. Capital expenditure rose compared to both periods. Consequently, free cash flow and its margin improved from the prior quarter but declined from the prior year.
Compared to the immediately preceding quarter, all metrics improved: revenue, operating cash flow, capital expenditure, free cash flow, and margin. Versus the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and margin were lower, while capital expenditure was higher.
Monitor the trend in capital expenditure, as it increased both sequentially and year over year, and the company's liquidity discussion confirms its reliance on cash flows from operations.