Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Extra Space Storage's first-quarter free cash flow improved sharply as capital expenditure declined dramatically from both the prior quarter and the same quarter one year earlier. Operating cash flow remained relatively stable, while revenue increased modestly.
- Operating cash flow far exceeded revenue, yielding a very high free cash flow margin. Capital expenditure was a small fraction of operating cash flow, allowing most of the cash generated from operations to convert into free cash flow.
- Compared with the prior quarter, operating cash flow was slightly lower but capital expenditure fell sharply, resulting in a higher free cash flow and margin. Versus the same quarter one year earlier, revenue was higher while operating cash flow was slightly lower; however, a much lower capital expenditure drove free cash flow and margin higher.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$211.9M
Trailing twelve-month free cash flow.
Quarter free cash flow
$268.5M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$281.6M
Cash generated by operations before capital spending.
CapEx
$13.1M
Capital spending and related asset purchases.
FCF margin
1255.8%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $20.5M | $352.9M | $220.9M | $132.0M | 643.3% |
| 2022-09-30 | $22.2M | $307.6M | $639.1M | -$331.5M | -1490.0% |
| 2022-12-31 | $21.2M | $290.1M | $147.3M | $142.8M | 674.1% |
| 2023-03-31 | $21.4M | $281.6M | $13.1M | $268.5M | 1255.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 136.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 61.3% | 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.
Lower Capital Expenditure
Capital expenditure decreased substantially from both the prior quarter and the year-ago quarter. This was the primary factor behind the improvement in free cash flow and free cash flow margin.
The reduction in capital expenditure directly boosted free cash flow without a corresponding change in operating cash flow.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow far exceeded revenue, yielding a very high free cash flow margin. Capital expenditure was a small fraction of operating cash flow, allowing most of the cash generated from operations to convert into free cash flow.
Compared with the prior quarter, operating cash flow was slightly lower but capital expenditure fell sharply, resulting in a higher free cash flow and margin. Versus the same quarter one year earlier, revenue was higher while operating cash flow was slightly lower; however, a much lower capital expenditure drove free cash flow and margin higher.
Monitor whether capital expenditure remains at this reduced level, given the significant decline from historical spending.