Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved from a negative free cash flow margin in the prior quarter to a positive margin, driven by a swing in operating cash flow. However, free cash flow and margin were lower than the same quarter one year earlier.
- Revenue was consistent with the prior quarter, while operating cash flow turned positive after a negative result in the prior quarter, and capital expenditure decreased. This led to a positive free cash flow and free cash flow margin, compared to a negative margin in the prior quarter.
- Compared to the prior quarter, operating cash flow, free cash flow, and free cash flow margin all improved from negative to positive. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$388.7M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$455.3M
Cash generated by operations before capital spending.
CapEx
$66.6M
Capital spending and related asset purchases.
FCF margin
15.8%
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 | $2.6B | $736.5M | $36.9M | $699.6M | 27.0% |
| 2022-09-30 | $2.5B | $661.0M | $59.1M | $601.9M | 24.0% |
| 2022-12-31 | $2.5B | -$175.0M | $86.4M | -$261.4M | -10.3% |
| 2023-03-31 | $2.5B | $455.3M | $66.6M | $388.7M | 15.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 100.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | 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 Swing
The strongest observable driver was the swing in operating cash flow from a negative amount in the prior quarter to a positive amount in the current quarter. This change was the primary factor behind the positive free cash flow.
The positive operating cash flow enabled the company to generate positive free cash flow after two consecutive quarters of negative free cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was consistent with the prior quarter, while operating cash flow turned positive after a negative result in the prior quarter, and capital expenditure decreased. This led to a positive free cash flow and free cash flow margin, compared to a negative margin in the prior quarter.
Compared to the prior quarter, operating cash flow, free cash flow, and free cash flow margin all improved from negative to positive. Compared to the same quarter one year earlier, revenue was lower, operating cash flow was lower, capital expenditure was higher, and free cash flow and margin were lower.
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