Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow was substantial in the current quarter, supported by strong operating cash flow and minimal capital expenditure. Revenue and operating cash flow were lower than the prior quarter, but free cash flow remained high.
- Operating cash flow converted into free cash flow at a high rate due to very low capital expenditure. The free cash flow margin was strong, reflecting efficient cash generation from revenue.
- Compared to the prior quarter, revenue and operating cash flow were lower, but free cash flow also decreased slightly as capital expenditure increased from zero. Versus the same quarter last year, revenue was lower while operating cash flow improved significantly.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$1.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$836.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$866.4M
Cash generated by operations before capital spending.
CapEx
$30.4M
Capital spending and related asset purchases.
FCF margin
29.4%
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 | $4.2B | $993.5M | $1.0M | $992.4M | 23.5% |
| 2022-12-31 | $3.3B | $776.0M | $5.0B | -$4.2B | -127.8% |
| 2023-03-31 | $3.0B | $959.5M | $0 | $959.5M | 32.2% |
| 2023-06-30 | $2.8B | $866.4M | $30.4M | $836.0M | 29.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 213.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$25.0B | 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
Operating cash flow was robust, providing the primary support for free cash flow. The company's cash generation from operations was solid despite lower revenue.
This driver enabled a high free cash flow margin and substantial free cash flow in the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow converted into free cash flow at a high rate due to very low capital expenditure. The free cash flow margin was strong, reflecting efficient cash generation from revenue.
Compared to the prior quarter, revenue and operating cash flow were lower, but free cash flow also decreased slightly as capital expenditure increased from zero. Versus the same quarter last year, revenue was lower while operating cash flow improved significantly.
Monitor the level of capital expenditure in upcoming quarters, as it was minimal this quarter and could affect free cash flow if it increases.