Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow both improved compared to the prior quarter and the same quarter last year. Free cash flow margin strengthened, reflecting higher operating cash flow and lower capital expenditure relative to the prior quarter.
- Cash conversion improved as operating cash flow grew faster than revenue, while capital expenditure decreased sequentially, resulting in a higher free cash flow margin.
- Compared to the prior quarter, free cash flow was higher, driven by increased operating cash flow and reduced capital spending. Relative to the same quarter last year, both operating cash flow and free cash flow were higher, with an improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$572.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$735.0M
Cash generated by operations before capital spending.
CapEx
$163.0M
Capital spending and related asset purchases.
FCF margin
12.0%
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 | $4.5B | $528.0M | $178.0M | $350.0M | 7.8% |
| 2022-09-30 | $4.5B | $969.0M | $175.0M | $794.0M | 17.8% |
| 2022-12-31 | $4.6B | $673.0M | $221.0M | $452.0M | 9.8% |
| 2023-03-31 | $4.8B | $735.0M | $163.0M | $572.0M | 12.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 153.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Working Capital Improvement
The filing indicates that the improvement in operating cash flow was primarily due to an improvement in working capital, partially offset by lower net income excluding non-cash items.
This improvement contributed to a higher free cash flow margin compared to both the prior quarter and the same quarter last year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion improved as operating cash flow grew faster than revenue, while capital expenditure decreased sequentially, resulting in a higher free cash flow margin.
Compared to the prior quarter, free cash flow was higher, driven by increased operating cash flow and reduced capital spending. Relative to the same quarter last year, both operating cash flow and free cash flow were higher, with an improved free cash flow margin.
Monitor the trend in capital expenditure, as it was lower than the prior quarter but higher than the same quarter last year, which could affect future free cash flow.