Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter after a negative prior quarter, supported by a significant improvement in operating cash flow. Revenue was stable sequentially, while the free cash flow margin strengthened compared to both the prior quarter and the same quarter last year.
- Operating cash flow was substantially higher than capital expenditure, resulting in positive free cash flow. The free cash flow margin improved from the prior quarter and was slightly above the year-ago level, indicating a stronger conversion of revenue into free cash flow.
- Compared to the prior quarter, operating cash flow increased sharply while capital expenditure decreased, reversing a negative free cash flow into a positive one. Versus the same quarter last year, revenue was lower but operating cash flow and free cash flow were both higher, with a slightly improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$878.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$340.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$444.0M
Cash generated by operations before capital spending.
CapEx
$104.0M
Capital spending and related asset purchases.
FCF margin
14.5%
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 | $2.5B | $502.0M | $118.0M | $384.0M | 15.4% |
| 2022-12-31 | $2.3B | $334.0M | $147.0M | $187.0M | 8.0% |
| 2023-03-31 | $2.3B | $94.0M | $127.0M | -$33.0M | -1.4% |
| 2023-06-30 | $2.3B | $444.0M | $104.0M | $340.0M | 14.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 144.7% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.4% | 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 Recovery
Operating cash flow rose sharply from the prior quarter, driving the turnaround from negative to positive free cash flow. This was the strongest observable factor in the quarter's cash conversion performance.
The improvement in operating cash flow was the primary reason free cash flow turned positive and the margin improved.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was substantially higher than capital expenditure, resulting in positive free cash flow. The free cash flow margin improved from the prior quarter and was slightly above the year-ago level, indicating a stronger conversion of revenue into free cash flow.
Compared to the prior quarter, operating cash flow increased sharply while capital expenditure decreased, reversing a negative free cash flow into a positive one. Versus the same quarter last year, revenue was lower but operating cash flow and free cash flow were both higher, with a slightly improved free cash flow margin.
Monitor whether operating cash flow can sustain its elevated level relative to revenue in subsequent quarters.