Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was unchanged from the prior quarter but higher than the same quarter last year. Free cash flow margin improved from a year ago but weakened slightly from the preceding quarter.
- Operating cash flow and free cash flow were both higher than a year earlier, with capital expenditure slightly higher. The resulting free cash flow margin expanded year-over-year but contracted sequentially.
- Compared to the prior quarter, revenue was stable while operating cash flow and free cash flow were lower, and capital expenditure was higher. Compared to the same quarter a year ago, revenue, operating cash flow, and free cash flow were all 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
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$538.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$722.0M
Cash generated by operations before capital spending.
CapEx
$184.0M
Capital spending and related asset purchases.
FCF margin
11.2%
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 | $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% |
| 2023-06-30 | $4.8B | $722.0M | $184.0M | $538.0M | 11.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 107.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.2B | 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 company's operating cash flow was higher than the prior year, attributed in the filing to an improvement in working capital, partially offset by lower net income excluding non-cash items.
This driver supported higher free cash flow and contributed to the year-over-year margin expansion.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow and free cash flow were both higher than a year earlier, with capital expenditure slightly higher. The resulting free cash flow margin expanded year-over-year but contracted sequentially.
Compared to the prior quarter, revenue was stable while operating cash flow and free cash flow were lower, and capital expenditure was higher. Compared to the same quarter a year ago, revenue, operating cash flow, and free cash flow were all higher, with an improved free cash flow margin.
Monitor working capital trends, as the filing noted that operating cash flow improvement in the first half of the year was primarily due to working capital improvement.