Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than both the prior quarter and the year-ago quarter, while free cash flow improved significantly year-over-year and weakened sequentially. Cash conversion strengthened markedly from the same quarter last year due to higher operating cash flow relative to revenue.
- Operating cash flow exceeded capital expenditure by a wider margin than both the prior quarter and the year-ago quarter, driving free cash flow and free cash flow margin higher compared to the same quarter last year.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was substantially higher, and free cash flow was lower, with free cash flow margin improved. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was much higher, capital expenditure was moderately higher, and free cash flow was significantly higher, with free cash flow margin sharply improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$951.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$307.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$479.0M
Cash generated by operations before capital spending.
CapEx
$172.0M
Capital spending and related asset purchases.
FCF margin
12.6%
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 | $3.6B | $274.0M | $137.0M | $137.0M | 3.8% |
| 2022-09-30 | $3.6B | $290.0M | $161.0M | $129.0M | 3.6% |
| 2022-12-31 | $3.7B | $439.0M | $61.0M | $378.0M | 10.1% |
| 2023-03-31 | $2.4B | $479.0M | $172.0M | $307.0M | 12.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 697.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.0% | 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 Strength
Operating cash flow rose sharply compared to the year-ago quarter, and even exceeded the prior quarter despite lower revenue. The filing notes favorable impacts from lower annual incentive compensation payouts and the timing of accounts payable payments.
Higher operating cash flow was the primary factor behind the year-over-year improvement in free cash flow and 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 exceeded capital expenditure by a wider margin than both the prior quarter and the year-ago quarter, driving free cash flow and free cash flow margin higher compared to the same quarter last year.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was higher, capital expenditure was substantially higher, and free cash flow was lower, with free cash flow margin improved. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was much higher, capital expenditure was moderately higher, and free cash flow was significantly higher, with free cash flow margin sharply improved.
Monitor the level of capital expenditure relative to operating cash flow, as the sequential increase in capital spending reduced free cash flow despite higher operating cash flow.