Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue held steady versus the prior quarter while operating cash flow was essentially unchanged, resulting in improved free cash flow margin as capital expenditure fell. Compared with the same quarter last year, revenue was higher and operating cash flow similar, but higher capital expenditure reduced free cash flow and margin.
- Operating cash flow was a large portion of revenue, and after deducting capital expenditure the resulting free cash flow margin was robust. The conversion from revenue to free cash flow was supported by strong operating cash flow generation relative to revenue.
- Compared with the prior quarter, revenue was stable and operating cash flow was similar, while significantly lower capital expenditure drove free cash flow higher and margin improved. Versus one year earlier, revenue increased but higher capital expenditure more than offset the revenue gain, leading to lower free cash flow and a weakened margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$824.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.3B
Cash generated by operations before capital spending.
CapEx
$432.0M
Capital spending and related asset purchases.
FCF margin
22.2%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $3.8B | $1.2B | $480.0M | $751.0M | 19.7% |
| 2022-09-30 | $3.9B | $1.7B | $626.0M | $1.1B | 28.2% |
| 2022-12-31 | $3.7B | $1.3B | $676.0M | $595.0M | 16.0% |
| 2023-03-31 | $3.7B | $1.3B | $432.0M | $824.0M | 22.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 84.6% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 11.7% | 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.
Capital Expenditure Volatility
Capital expenditure was lower than the prior quarter but higher than the year-ago period, directly influencing free cash flow direction. The filing notes higher property additions versus the prior year as part of investing activities.
Changes in capital spending were the strongest observable driver of free cash flow variability across the comparison periods.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was a large portion of revenue, and after deducting capital expenditure the resulting free cash flow margin was robust. The conversion from revenue to free cash flow was supported by strong operating cash flow generation relative to revenue.
Compared with the prior quarter, revenue was stable and operating cash flow was similar, while significantly lower capital expenditure drove free cash flow higher and margin improved. Versus one year earlier, revenue increased but higher capital expenditure more than offset the revenue gain, leading to lower free cash flow and a weakened margin.
Monitor capital expenditure levels, as their variation between periods was the primary observable factor affecting free cash flow.