Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and margin weakened sequentially and year-over-year, as higher capital expenditure outpaced operating cash flow growth. Revenue was lower than the prior quarter but higher than the same quarter last year.
- Operating cash flow improved from the prior quarter but declined from the year-ago quarter. Capital expenditure increased both sequentially and year-over-year, resulting in lower free cash flow and a narrower free cash flow margin.
- Compared to the prior quarter, revenue was lower while operating cash flow was higher, but a larger increase in capital expenditure drove free cash flow and margin lower. Versus the same quarter last year, revenue was higher, yet operating cash flow was lower and capital expenditure was higher, leading to a weakened free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$464.6M
Trailing twelve-month free cash flow.
Quarter free cash flow
$103.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$741.0M
Cash generated by operations before capital spending.
CapEx
$638.0M
Capital spending and related asset purchases.
FCF margin
5.1%
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 | $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% |
| 2023-06-30 | $2.0B | $741.0M | $638.0M | $103.0M | 5.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 49.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 31.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$11.1B | 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 Growth
Capital expenditure rose from both the prior quarter and the year-ago quarter, while operating cash flow did not keep pace. This divergence was the strongest observable driver of the decline in free cash flow and margin.
Higher capital expenditure absorbed a larger share of operating cash flow, reducing free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow improved from the prior quarter but declined from the year-ago quarter. Capital expenditure increased both sequentially and year-over-year, resulting in lower free cash flow and a narrower free cash flow margin.
Compared to the prior quarter, revenue was lower while operating cash flow was higher, but a larger increase in capital expenditure drove free cash flow and margin lower. Versus the same quarter last year, revenue was higher, yet operating cash flow was lower and capital expenditure was higher, leading to a weakened free cash flow and margin.
Monitor the trajectory of capital expenditure relative to operating cash flow, as its increase has been the primary factor compressing free cash flow.