Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was lower than both the prior quarter and the same quarter last year, despite revenue being higher than both periods. The free cash flow margin weakened compared to both the preceding quarter and the year-ago quarter.
- Revenue increased from both the prior quarter and the year-ago quarter, but operating cash flow decreased compared to both periods. Capital expenditure was slightly higher than both the prior quarter and the year-ago quarter, contributing to the lower free cash flow.
- Compared to the prior quarter, revenue improved while operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin. Compared to the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, also leading to a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$6.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$92.0M
Capital spending and related asset purchases.
FCF margin
30.1%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $6.1B | $2.0M | $98.0M | -$96.0M | -1.6% |
| 2022-12-31 | $4.0B | $2.2B | $75.0M | $2.1B | 51.8% |
| 2023-03-31 | $3.8B | $2.9B | $88.0M | $2.8B | 74.1% |
| 2023-06-30 | $5.5B | $1.7B | $92.0M | $1.6B | 30.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | n/a | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | $549.0M | 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 Decline
Operating cash flow decreased compared to both the prior quarter and the year-ago quarter, even as revenue increased. This was the primary observable factor behind the lower free cash flow.
The decline in operating cash flow drove the reduction in free cash flow and the weakening of the free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased from both the prior quarter and the year-ago quarter, but operating cash flow decreased compared to both periods. Capital expenditure was slightly higher than both the prior quarter and the year-ago quarter, contributing to the lower free cash flow.
Compared to the prior quarter, revenue improved while operating cash flow and free cash flow were lower, resulting in a weakened free cash flow margin. Compared to the same quarter last year, revenue was higher but operating cash flow and free cash flow were lower, also leading to a weakened margin.
Monitor the trend in operating cash flow relative to revenue, as it declined despite higher revenue in the current quarter.