Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved significantly compared to both the prior quarter and the same quarter last year. Operating cash flow rose while capital expenditure also increased, resulting in a higher free cash flow margin.
- Operating cash flow increased relative to revenue, as revenue declined sequentially but operating cash flow grew. The conversion from revenue to free cash flow strengthened compared to both prior periods.
- Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, with an improved margin. Versus the same quarter last year, revenue was slightly higher and all cash flow metrics were higher, with a stronger margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$315.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
$270.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$450.0M
Cash generated by operations before capital spending.
CapEx
$180.0M
Capital spending and related asset purchases.
FCF margin
3.9%
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 |
|---|---|---|---|---|---|
| 2022-07-01 | $7.0B | $38.0M | $107.0M | -$69.0M | -1.0% |
| 2022-09-30 | $8.2B | $103.0M | $189.0M | -$86.0M | -1.1% |
| 2022-12-31 | $7.8B | $359.0M | $159.0M | $200.0M | 2.6% |
| 2023-03-31 | $7.0B | $450.0M | $180.0M | $270.0M | 3.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 190.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.6% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$530.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Stronger Operating Cash Flow
Operating cash flow rose sequentially despite lower revenue, and also increased year over year. This was the primary factor behind the improvement in free cash flow and margin.
The higher operating cash flow more than offset the increase in capital expenditure, lifting free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased relative to revenue, as revenue declined sequentially but operating cash flow grew. The conversion from revenue to free cash flow strengthened compared to both prior periods.
Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher, with an improved margin. Versus the same quarter last year, revenue was slightly higher and all cash flow metrics were higher, with a stronger margin.
Monitor capital expenditure levels, as the increase relative to last year was notable while operating cash flow showed improvement.