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 the prior quarter, while capital expenditure increased, resulting in a lower free cash flow and margin. The year-ago quarter had significantly higher revenue, operating cash flow, and free cash flow with lower capital expenditure.
- The cash conversion ratio, measured by free cash flow margin, weakened as operating cash flow decreased and capital expenditure increased relative to revenue.
- Compared to the prior quarter, free cash flow was lower due to a decline in operating cash flow and a rise in capital expenditure. Versus the same quarter a year ago, all metrics were lower, with capital expenditure being higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$326.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.4B
Cash generated by operations before capital spending.
CapEx
$1.1B
Capital spending and related asset purchases.
FCF margin
9.2%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | $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% |
| 2023-06-30 | $3.5B | $1.4B | $1.1B | $326.0M | 9.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 47.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 30.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$6.0B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Decline in Operating Cash Flow
Operating cash flow decreased from the prior quarter and was substantially lower than the year-ago quarter, while capital expenditure increased.
The combination of lower cash from operations and higher investment spending reduced free cash flow significantly.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The cash conversion ratio, measured by free cash flow margin, weakened as operating cash flow decreased and capital expenditure increased relative to revenue.
Compared to the prior quarter, free cash flow was lower due to a decline in operating cash flow and a rise in capital expenditure. Versus the same quarter a year ago, all metrics were lower, with capital expenditure being higher.
Monitor the trend in capital expenditure relative to operating cash flow, as it has consumed a larger share of cash generation.