Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
The quarter's free cash flow turned positive from the prior quarter, supported by a lower capital expenditure. However, the free cash flow margin was lower compared to the same quarter a year earlier.
- Revenue increased, while operating cash flow was higher than a year ago but lower than the prior quarter. Capital expenditure decreased significantly from the prior quarter, resulting in positive free cash flow. The free cash flow margin improved from negative to positive sequentially but was lower than the year-ago level.
- Compared to the previous quarter, free cash flow improved from negative to positive, driven by lower capital expenditure. Versus the same quarter a year ago, free cash flow was slightly lower, and the margin weakened.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$678.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$162.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$692.0M
Cash generated by operations before capital spending.
CapEx
$530.0M
Capital spending and related asset purchases.
FCF margin
7.3%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $1.8B | $801.6M | $484.8M | $316.8M | 17.4% |
| 2022-09-30 | $1.8B | $820.3M | $552.7M | $267.6M | 14.5% |
| 2022-12-31 | $1.9B | $760.0M | $827.9M | -$67.9M | -3.6% |
| 2023-03-31 | $2.2B | $692.0M | $530.0M | $162.0M | 7.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 62.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 23.8% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$10.8B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Reduced Capital Expenditure
Capital expenditure decreased substantially from the prior quarter, allowing free cash flow to turn positive.
This shift was the primary factor in the cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased, while operating cash flow was higher than a year ago but lower than the prior quarter. Capital expenditure decreased significantly from the prior quarter, resulting in positive free cash flow. The free cash flow margin improved from negative to positive sequentially but was lower than the year-ago level.
Compared to the previous quarter, free cash flow improved from negative to positive, driven by lower capital expenditure. Versus the same quarter a year ago, free cash flow was slightly lower, and the margin weakened.
Monitor the trend in capital expenditure relative to operating cash flow, as the current quarter's improvement was largely due to reduced spending.