Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased versus the prior quarter and the same quarter last year, but operating cash flow and free cash flow declined, resulting in a lower free cash flow margin. The decrease in cash from operations drove the weaker free cash flow performance.
- Despite higher revenue, operating cash flow fell, indicating weaker conversion of revenue into cash. Capital expenditure was relatively stable, so the decline in free cash flow and margin was primarily due to lower cash generation from operations.
- Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Relative to the same quarter last year, revenue was also higher while operating cash flow, free cash flow, and margin declined, though capital expenditure decreased.
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
$538.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$878.0M
Cash generated by operations before capital spending.
CapEx
$340.0M
Capital spending and related asset purchases.
FCF margin
11.3%
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 | $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% |
| 2023-06-30 | $4.8B | $878.0M | $340.0M | $538.0M | 11.3% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 78.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 7.1% | 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.
Operating Cash Flow Decline
Operating cash flow decreased compared to both the prior quarter and the same quarter last year, even as revenue grew. This was the strongest observable factor behind the lower free cash flow and margin.
The lower operating cash flow reduced free cash flow and compressed the free cash flow margin for the quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Despite higher revenue, operating cash flow fell, indicating weaker conversion of revenue into cash. Capital expenditure was relatively stable, so the decline in free cash flow and margin was primarily due to lower cash generation from operations.
Compared to the prior quarter, revenue was higher but operating cash flow, free cash flow, and free cash flow margin were all lower. Relative to the same quarter last year, revenue was also higher while operating cash flow, free cash flow, and margin declined, though capital expenditure decreased.
Monitor the trend in operating cash flow relative to revenue, as it has a direct impact on free cash flow generation.