Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue and operating cash flow were lower than both the prior quarter and the same quarter a year earlier. Free cash flow and free cash flow margin also declined compared with both periods.
- Operating cash flow as a proportion of revenue was lower than the prior quarter and substantially lower than the year-ago quarter. Capital expenditure was higher than the year-ago quarter but slightly lower than the prior quarter, yielding a free cash flow margin that weakened relative to both comparison periods.
- Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was slightly lower. Compared with the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower, and capital expenditure was higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.2B
Trailing twelve-month free cash flow.
Quarter free cash flow
$392.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$889.0M
Cash generated by operations before capital spending.
CapEx
$497.0M
Capital spending and related asset purchases.
FCF margin
11.6%
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 | $3.5B | $909.0M | $415.0M | $494.0M | 14.0% |
| 2022-09-30 | $3.2B | $1.3B | $540.0M | $773.0M | 24.4% |
| 2022-12-31 | $4.1B | $1.1B | $524.0M | $526.0M | 12.7% |
| 2023-03-31 | $3.4B | $889.0M | $497.0M | $392.0M | 11.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 28.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 14.7% | 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.
Revenue growth versus operating cash flow divergence
Revenue was higher than the year-ago quarter, yet operating cash flow was lower, indicating that the cash conversion from revenue weakened significantly. This divergence is the strongest observable driver of the lower free cash flow.
The combination of higher revenue but lower operating cash flow compressed free cash flow and free cash flow margin versus the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a proportion of revenue was lower than the prior quarter and substantially lower than the year-ago quarter. Capital expenditure was higher than the year-ago quarter but slightly lower than the prior quarter, yielding a free cash flow margin that weakened relative to both comparison periods.
Compared with the immediately preceding quarter, revenue, operating cash flow, free cash flow, and free cash flow margin were all lower, while capital expenditure was slightly lower. Compared with the same quarter one year earlier, revenue was higher, but operating cash flow, free cash flow, and free cash flow margin were all lower, and capital expenditure was higher.
Monitor the free cash flow margin, which declined relative to both the prior quarter and the year-ago quarter.