Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased sharply from the prior quarter but was slightly lower than the same quarter last year. Operating cash flow and free cash flow turned positive year-over-year, yet declined substantially from the preceding quarter, resulting in a markedly lower free cash flow margin.
- Revenue was higher than the previous quarter, yet operating cash flow was much lower, indicating a weaker conversion of sales into cash. Compared to a year ago, revenue was slightly lower but operating cash flow improved from negative to positive, so free cash flow also turned positive.
- Sequentially, revenue increased while operating cash flow, free cash flow, and free cash flow margin all decreased. Year-over-year, revenue was slightly lower, but operating cash flow and free cash flow improved from negative to positive, and the margin strengthened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$50.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$120.0M
Cash generated by operations before capital spending.
CapEx
$70.0M
Capital spending and related asset purchases.
FCF margin
1.1%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $5.2B | $32.0M | $66.0M | -$34.0M | -0.7% |
| 2022-09-30 | $5.5B | $790.0M | $91.0M | $699.0M | 12.8% |
| 2022-12-31 | $2.0B | $1.1B | $104.0M | $1.0B | 51.7% |
| 2023-03-31 | $4.5B | $120.0M | $70.0M | $50.0M | 1.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 12.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Year-over-year improvement in operating cash flow
Operating cash flow rose from negative in the year-ago quarter to positive, lifting free cash flow into positive territory. This change was the primary factor behind the year-over-year turnaround in free cash flow margin.
The shift to positive operating cash flow enabled the company to generate free cash flow this quarter, compared to a free cash outflow one year earlier.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than the previous quarter, yet operating cash flow was much lower, indicating a weaker conversion of sales into cash. Compared to a year ago, revenue was slightly lower but operating cash flow improved from negative to positive, so free cash flow also turned positive.
Sequentially, revenue increased while operating cash flow, free cash flow, and free cash flow margin all decreased. Year-over-year, revenue was slightly lower, but operating cash flow and free cash flow improved from negative to positive, and the margin strengthened.
Monitor the relationship between operating cash flow and revenue, as the sequential decline in cash conversion against a higher revenue base warrants attention.