Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow decreased compared to both the prior quarter and the same quarter last year, driven by lower operating cash flow and higher capital expenditure. Revenue increased year over year but was relatively stable sequentially.
- Cash conversion weakened as operating cash flow as a percentage of revenue declined, while capital expenditure rose, resulting in a lower free cash flow margin.
- Compared to the prior quarter, free cash flow and margin were lower despite similar revenue, as operating cash flow decreased and capital expenditure increased. Versus the same quarter last year, free cash flow and margin were significantly lower, with operating cash flow down and capital expenditure up, even though revenue was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$262.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$483.0M
Cash generated by operations before capital spending.
CapEx
$221.0M
Capital spending and related asset purchases.
FCF margin
3.0%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $7.3B | $382.0M | $202.0M | $180.0M | 2.5% |
| 2022-12-31 | $7.8B | $817.0M | $463.0M | $354.0M | 4.6% |
| 2023-03-31 | $8.5B | $495.0M | $193.0M | $302.0M | 3.6% |
| 2023-06-30 | $8.6B | $483.0M | $221.0M | $262.0M | 3.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 35.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | 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.
Operating Cash Flow Decline
Operating cash flow decreased both sequentially and year over year, while revenue increased year over year, indicating a weaker cash conversion from sales.
This decline was the primary factor behind the lower free cash flow and margin in the current quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion weakened as operating cash flow as a percentage of revenue declined, while capital expenditure rose, resulting in a lower free cash flow margin.
Compared to the prior quarter, free cash flow and margin were lower despite similar revenue, as operating cash flow decreased and capital expenditure increased. Versus the same quarter last year, free cash flow and margin were significantly lower, with operating cash flow down and capital expenditure up, even though revenue was higher.
Monitor the trend in operating cash flow relative to revenue, as it has declined sequentially and year over year.