Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive and the margin improved, supported by a rise in revenue and operating cash flow compared to the prior quarter. Revenue was lower than the year-ago quarter, but free cash flow increased as capital expenditure declined.
- Cash conversion strengthened as operating cash flow swung from negative to positive and capital expenditure decreased markedly, resulting in positive free cash flow and an improved free cash flow margin relative to both the prior quarter and the year-ago period.
- Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from negative to positive. Compared to the same quarter last year, revenue was lower, but free cash flow and margin were higher, as capital expenditure was significantly reduced.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$393.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$485.0M
Cash generated by operations before capital spending.
CapEx
$92.0M
Capital spending and related asset purchases.
FCF margin
4.1%
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 | $14.5B | $1.4B | $252.0M | $1.2B | 8.1% |
| 2022-12-31 | $16.0B | $4.5B | $139.0M | $4.4B | 27.2% |
| 2023-03-31 | $7.0B | -$259.0M | $298.0M | -$557.0M | -7.9% |
| 2023-06-30 | $9.5B | $485.0M | $92.0M | $393.0M | 4.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 1190.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.0% | 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.
Free Cash Flow Recovery
Free cash flow turned positive and the margin expanded, coinciding with operating cash flow moving from negative to positive and a large decrease in capital expenditure.
This improvement strengthens the company's cash generation profile compared to the prior quarter and the year-ago quarter.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion strengthened as operating cash flow swung from negative to positive and capital expenditure decreased markedly, resulting in positive free cash flow and an improved free cash flow margin relative to both the prior quarter and the year-ago period.
Compared to the prior quarter, revenue, operating cash flow, and free cash flow all improved, with free cash flow turning from negative to positive. Compared to the same quarter last year, revenue was lower, but free cash flow and margin were higher, as capital expenditure was significantly reduced.
Monitor the trajectory of capital expenditure, given its significant reduction from prior periods.