Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Despite a decline in revenue compared to both the prior quarter and the same quarter a year earlier, free cash flow improved substantially, driven by a higher operating cash flow and a lower capital expenditure. The free cash flow margin strengthened significantly, reflecting enhanced cash conversion efficiency.
- Operating cash flow increased relative to the prior quarter and the same quarter a year earlier, while capital expenditure decreased, resulting in a higher free cash flow. The free cash flow margin rose, indicating improved conversion of revenue into free cash flow.
- Revenue was lower than both the prior quarter and the same quarter a year earlier. However, operating cash flow, free cash flow, and free cash flow margin were all higher, with the margin showing a notable improvement from the prior quarter and an even larger improvement from the year-ago quarter.
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
$536.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$546.4M
Cash generated by operations before capital spending.
CapEx
$10.1M
Capital spending and related asset purchases.
FCF margin
20.7%
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 | $4.6B | $558.6M | $38.2M | $520.5M | 11.3% |
| 2022-09-30 | $4.4B | $670.4M | $15.9M | $654.5M | 15.0% |
| 2022-12-31 | $3.4B | $486.7M | $18.3M | $468.4M | 13.6% |
| 2023-03-31 | $2.6B | $546.4M | $10.1M | $536.3M | 20.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 237.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.4% | 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.
Improved Cash Conversion Efficiency
Operating cash flow increased even as revenue declined, while capital expenditure was reduced, leading to a higher free cash flow and a materially stronger free cash flow margin. This improvement occurred without relying on revenue growth.
The company generated more free cash flow per dollar of revenue in the current quarter compared to both prior periods, strengthening its financial flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased relative to the prior quarter and the same quarter a year earlier, while capital expenditure decreased, resulting in a higher free cash flow. The free cash flow margin rose, indicating improved conversion of revenue into free cash flow.
Revenue was lower than both the prior quarter and the same quarter a year earlier. However, operating cash flow, free cash flow, and free cash flow margin were all higher, with the margin showing a notable improvement from the prior quarter and an even larger improvement from the year-ago quarter.
Monitor the trajectory of revenue, as it declined substantially from both the prior quarter and the year-ago period, which could pressure future cash generation if the trend continues.