Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow declined compared to both the prior quarter and the same quarter a year earlier. Capital expenditure increased, resulting in free cash flow and free cash flow margin that were lower than both comparison periods.
- Operating cash flow was lower than revenue, and capital expenditure as a proportion of operating cash flow was higher, leading to a free cash flow margin that weakened from the prior quarter and from a year ago.
- Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all decreased, while capital expenditure increased. The same pattern held when comparing to the same quarter one year earlier, with the additional observation that free cash flow margin was lower than both.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$665.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.7B
Cash generated by operations before capital spending.
CapEx
$1.0B
Capital spending and related asset purchases.
FCF margin
17.7%
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 | $5.8B | $2.7B | $573.0M | $2.1B | 36.3% |
| 2022-09-30 | $5.2B | $2.1B | $628.0M | $1.5B | 28.5% |
| 2022-12-31 | $4.4B | $1.9B | $804.0M | $1.1B | 25.4% |
| 2023-03-31 | $3.8B | $1.7B | $1.0B | $665.0M | 17.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 66.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 26.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$5.7B | 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 Increase
Capital expenditure was higher than both the prior quarter and the same quarter a year earlier, while operating cash flow was lower. This divergence reduced free cash flow.
The increase in capital expenditure, combined with lower operating cash flow, caused free cash flow and free cash flow margin to decline.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow was lower than revenue, and capital expenditure as a proportion of operating cash flow was higher, leading to a free cash flow margin that weakened from the prior quarter and from a year ago.
Compared to the preceding quarter, revenue, operating cash flow, and free cash flow all decreased, while capital expenditure increased. The same pattern held when comparing to the same quarter one year earlier, with the additional observation that free cash flow margin was lower than both.
Monitor the trend in capital expenditure relative to operating cash flow, as changes directly affect free cash flow generation.