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 from the prior quarter and from the year-ago quarter. Free cash flow improved from negative a year earlier but weakened sequentially, resulting in a low single-digit free cash flow margin.
- Cash conversion from revenue weakened materially, with operating cash flow as a percentage of revenue decreasing sharply compared with the prior quarter, and capital expenditure remaining relatively stable. Free cash flow margin turned positive versus the negative year-ago quarter but remained low.
- Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all declined, and free cash flow margin weakened. Versus the same quarter one year earlier, revenue was lower and operating cash flow was higher, while free cash flow improved from negative to positive.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.1B
Trailing twelve-month free cash flow.
Quarter free cash flow
$33.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$266.0M
Cash generated by operations before capital spending.
CapEx
$233.0M
Capital spending and related asset purchases.
FCF margin
0.9%
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 | $3.6B | $1.1B | $382.0M | $689.0M | 19.3% |
| 2022-09-30 | $3.9B | -$650.0M | $152.0M | -$802.0M | -20.4% |
| 2022-12-31 | $4.6B | $1.4B | $267.0M | $1.1B | 24.5% |
| 2023-03-31 | $3.8B | $266.0M | $233.0M | $33.0M | 0.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 21.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.2% | 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 decline
Operating cash flow decreased sequentially by a large margin, while capital expenditure decreased modestly, causing free cash flow to decline substantially. The free cash flow margin dropped from approximately one-quarter to under one percent.
The quarter's cash generation was significantly weaker than the prior quarter, indicating a shift in cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion from revenue weakened materially, with operating cash flow as a percentage of revenue decreasing sharply compared with the prior quarter, and capital expenditure remaining relatively stable. Free cash flow margin turned positive versus the negative year-ago quarter but remained low.
Compared with the immediately preceding quarter, revenue, operating cash flow, and free cash flow all declined, and free cash flow margin weakened. Versus the same quarter one year earlier, revenue was lower and operating cash flow was higher, while free cash flow improved from negative to positive.
Monitor whether operating cash flow can stabilize or improve given the decline from the prior quarter, as capital expenditure has remained at a similar level.