Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue declined from both the prior quarter and the year-ago quarter, while free cash flow matched the year-ago level but fell from the prior quarter. The free cash flow margin improved from a year ago but weakened sequentially.
- Revenue was lower than both the immediately preceding quarter and the same quarter one year earlier. Operating cash flow decreased sequentially and was slightly lower than a year ago. Capital expenditure was similar across periods. Free cash flow equaled the year-ago amount but was lower than the prior quarter. The free cash flow margin improved from the year-ago quarter but declined from the prior quarter.
- Compared with the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Compared with the year-ago quarter, revenue was lower, operating cash flow was slightly lower, free cash flow was unchanged, and free cash flow margin was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$7.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.9B
Cash generated by operations before capital spending.
CapEx
$266.0M
Capital spending and related asset purchases.
FCF margin
28.3%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $8.9B | $2.0B | $296.0M | $1.7B | 19.1% |
| 2022-09-30 | $7.7B | $2.0B | $277.0M | $1.7B | 22.6% |
| 2022-12-31 | $7.1B | $2.5B | $295.0M | $2.2B | 31.5% |
| 2023-03-31 | $5.9B | $1.9B | $266.0M | $1.7B | 28.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 115.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | 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.
Revenue Decline
Revenue decreased from both the prior quarter and the year-ago quarter. This decline is the most notable change among the reported metrics.
Lower revenue coincided with lower operating cash flow sequentially and a slightly lower operating cash flow year-over-year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the immediately preceding quarter and the same quarter one year earlier. Operating cash flow decreased sequentially and was slightly lower than a year ago. Capital expenditure was similar across periods. Free cash flow equaled the year-ago amount but was lower than the prior quarter. The free cash flow margin improved from the year-ago quarter but declined from the prior quarter.
Compared with the prior quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower. Compared with the year-ago quarter, revenue was lower, operating cash flow was slightly lower, free cash flow was unchanged, and free cash flow margin was higher.
Monitor the trajectory of revenue and operating cash flow given the sequential decline and the unchanged free cash flow year-over-year.