Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved sharply versus the same quarter last year, with free cash flow turning positive from a negative position. Compared to the prior quarter, however, both operating cash flow and free cash flow were lower.
- Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased substantially year-over-year but decreased from the preceding quarter. Capital expenditure was stable across periods. Free cash flow and free cash flow margin improved from a negative year-ago level but weakened relative to the prior quarter.
- Compared to the immediately preceding quarter, revenue was lower, operating cash flow was lower, and free cash flow was lower, resulting in a weakened free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, and free cash flow turned positive from negative, leading to a significantly improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.2B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.6B
Cash generated by operations before capital spending.
CapEx
$422.0M
Capital spending and related asset purchases.
FCF margin
7.3%
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 | $14.2B | $2.2B | $240.0M | $2.0B | 14.0% |
| 2022-09-30 | $15.0B | $2.5B | $282.0M | $2.2B | 14.7% |
| 2022-12-31 | $16.6B | $2.7B | $428.0M | $2.3B | 13.9% |
| 2023-03-31 | $15.9B | $1.6B | $422.0M | $1.2B | 7.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 59.3% | 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.
Year-over-Year Operating Cash Flow Improvement
Operating cash flow increased substantially compared to the same quarter last year, driving free cash flow from negative to positive. The filing context notes that consolidated operating cash flow rose primarily due to certain factors, without specifying further detail.
This improvement was the strongest observable driver of the quarter's free cash flow performance.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was higher than both the prior quarter and the year-ago quarter. Operating cash flow increased substantially year-over-year but decreased from the preceding quarter. Capital expenditure was stable across periods. Free cash flow and free cash flow margin improved from a negative year-ago level but weakened relative to the prior quarter.
Compared to the immediately preceding quarter, revenue was lower, operating cash flow was lower, and free cash flow was lower, resulting in a weakened free cash flow margin. Versus the same quarter one year earlier, revenue was higher, operating cash flow was higher, and free cash flow turned positive from negative, leading to a significantly improved free cash flow margin.
Monitor the trend in operating cash flow, as it declined from the prior quarter despite being higher year-over-year.