Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
In the current quarter, the company converted revenue into positive free cash flow, with a margin that reflects the proportion of free cash flow to revenue. Compared to the immediately preceding quarter, free cash flow and margin weakened, but relative to the same quarter one year earlier, both significantly improved.
- Operating cash flow, after deducting capital expenditure, generated free cash flow. The free cash flow margin indicates the efficiency of converting revenue into free cash flow, which was positive this quarter.
- Sequentially, operating cash flow and free cash flow were lower, while capital expenditure remained relatively stable, leading to a lower free cash flow margin. Year-over-year, all cash flow metrics were higher, and the margin improved notably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$3.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$791.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.1B
Cash generated by operations before capital spending.
CapEx
$339.0M
Capital spending and related asset purchases.
FCF margin
17.4%
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 |
|---|---|---|---|---|---|
| 2022-06-30 | $4.5B | $990.0M | $387.0M | $603.0M | 13.6% |
| 2022-09-30 | $4.5B | $1.2B | $430.0M | $750.0M | 16.6% |
| 2022-12-31 | $4.6B | $1.6B | $331.0M | $1.3B | 28.1% |
| 2023-03-31 | $4.5B | $1.1B | $339.0M | $791.0M | 17.4% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 140.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.5% | 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.
Sequential Decline in Operating Cash Flow
Operating cash flow in the current quarter was lower than the previous quarter, which was the primary observable factor behind the reduction in free cash flow and margin.
The lower operating cash flow directly reduced free cash flow and compressed the free cash flow margin relative to the prior quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow, after deducting capital expenditure, generated free cash flow. The free cash flow margin indicates the efficiency of converting revenue into free cash flow, which was positive this quarter.
Sequentially, operating cash flow and free cash flow were lower, while capital expenditure remained relatively stable, leading to a lower free cash flow margin. Year-over-year, all cash flow metrics were higher, and the margin improved notably.
Monitor the trend of operating cash flow given its sequential decline, as it directly impacts free cash flow generation.