Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and cash generation strengthened substantially in the current quarter. Operating cash flow rose sharply, driving free cash flow and margin to levels well above both the prior quarter and the same quarter last year.
- The conversion of revenue into operating cash flow improved markedly, as operating cash flow increased at a faster pace than revenue. Capital expenditure also rose, but free cash flow growth outpaced the increase in spending.
- Compared with the immediately preceding quarter, all key cash flow metrics were higher. Versus the same quarter one year earlier, the improvement was equally pronounced, with free cash flow and margin reaching notably higher levels.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.7B
Trailing twelve-month free cash flow.
Quarter free cash flow
$690.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$850.0M
Cash generated by operations before capital spending.
CapEx
$160.0M
Capital spending and related asset purchases.
FCF margin
11.8%
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 | $5.3B | $965.0M | $135.0M | $830.0M | 15.6% |
| 2022-12-31 | $5.4B | $1.2B | $209.0M | $977.0M | 18.1% |
| 2023-03-31 | $5.5B | $335.0M | $126.0M | $209.0M | 3.8% |
| 2023-06-30 | $5.9B | $850.0M | $160.0M | $690.0M | 11.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 92.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$8.9B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong Operating Cash Flow Growth
Operating cash flow increased substantially from both the prior quarter and the year-ago period, providing the main impetus for the rise in free cash flow. Revenue growth also contributed to the improved cash generation.
The elevated free cash flow and margin provide additional financial resources for the company.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The conversion of revenue into operating cash flow improved markedly, as operating cash flow increased at a faster pace than revenue. Capital expenditure also rose, but free cash flow growth outpaced the increase in spending.
Compared with the immediately preceding quarter, all key cash flow metrics were higher. Versus the same quarter one year earlier, the improvement was equally pronounced, with free cash flow and margin reaching notably higher levels.
Monitor the sustainability of the elevated free cash flow margin, as it depends on continued strong operating cash flow relative to revenue.