Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow and free cash flow margin improved substantially compared to both the prior quarter and the same quarter a year earlier. The improvement was primarily driven by a higher operating cash flow while capital expenditures remained relatively stable.
- The company converted a significantly higher share of revenue into operating cash flow this quarter versus both the prior quarter and the year-ago quarter, resulting in a much stronger free cash flow margin.
- Revenue was stable compared to the prior quarter but lower compared to the same quarter last year. Operating cash flow improved markedly against both periods, and capital expenditure was lower than a year ago, leading to a strong increase in free cash flow and margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.6B
Trailing twelve-month free cash flow.
Quarter free cash flow
$890.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$197.0M
Capital spending and related asset purchases.
FCF margin
36.7%
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 |
|---|---|---|---|---|---|
| 2022-09-30 | -$16.0M | $878.0M | $233.0M | $645.0M | -4031.3% |
| 2022-12-31 | $2.5B | $1.1B | $564.0M | $577.0M | 22.8% |
| 2023-03-31 | $2.4B | $632.0M | $193.0M | $439.0M | 18.3% |
| 2023-06-30 | $2.4B | $1.1B | $197.0M | $890.0M | 36.7% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | -13.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.4B | 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
The ratio of operating cash flow to revenue increased sharply compared to both the prior quarter and the year-ago quarter. This efficiency improvement was the primary factor behind the higher free cash flow margin.
Higher cash conversion efficiency directly led to a stronger free cash flow margin despite stable revenue versus the prior quarter and lower revenue versus the prior year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted a significantly higher share of revenue into operating cash flow this quarter versus both the prior quarter and the year-ago quarter, resulting in a much stronger free cash flow margin.
Revenue was stable compared to the prior quarter but lower compared to the same quarter last year. Operating cash flow improved markedly against both periods, and capital expenditure was lower than a year ago, leading to a strong increase in free cash flow and margin.
Monitor whether the elevated operating cash flow conversion rate can be maintained given the lower revenue base compared to the prior year.